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Chrysler bankruptcy has little impact on China operations

By Li Fangfang (China Daily)
Updated: 2009-05-05 07:51

Chrysler Jeep model Rubicon on display at the Shanghai International Automobile Industry Exhibition in April. [CFP]

The bankruptcy protection filing of US vehicle maker Chrysler will have little impact on its China business, where it is gearing up to become an important player, a top company executive said yesterday.

"I have to stress that what Chrysler has filed for bankruptcy does not deal with any international business, including those in China," said John Kett, vice-president of Chrysler and CEO of Chrysler Asia-Pacific yesterday.

"It will have no impact on our businesses in China, including marketing, sales, service and parts supply. Moreover, we expect to be a key player in China's automobile industry in the near future, not only by selling vehicles here, but also by designing and manufacturing," he said.

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The ailing automaker filed for bankruptcy protection to the US government on April 30, promising to form a vibrant new company through a global strategic alliance with Italy's Fiat in the coming 30 to 60 days.

"Although it is still early to talk about how much the alliance would influence the company's China strategy, we believe, the comprehensive restructuring plan will benefit Chrysler's development here," said Kett.

Currently, Chrysler only provides imported vehicles under its Jeep, Chrysler and Dodge brands in China, which accounts for a very small share in the world's biggest automobile market, without any local production.

Chrysler delivered 12,000 vehicles in the domestic market in 2007, and over 3,000 units of 300C sedans in 2008.

In the first quarter, the company's imported vehicle sales in China increased 17 percent from last year, as it continued to bring in new models.

"We expect a brighter future globally and in China, through the mutually beneficial alliance with Fiat," said Kett.

He disclosed that setting up a joint venture in China between Chrysler and Fiat is the long-term target for the alliance. Moreover, Chrysler is also seeking a local partner.

Fiat China is expected to respond to the alliance overtures in two days, said sources.

Italy's biggest carmaker is also actively looking for local partners in China. The company is expected to expand its cooperation with Guangzhou Auto from the current technology sharing to a manufacturing joint venture.

"We will never consider quitting China market after our split with Nanjing Auto. The best way for us to take roots in China is to choose a new local partner," said Paolo Arpellino, chief representative of Fiat China.

He told China Daily that both Fiat and Guangzhou Auto are satisfied with their technology cooperation.

Although Arpellino refused to confirm the news of a joint venture between Fiat and Guangzhou Auto, analysts expect the two companies to formally announce it soon.