China-made Chryslers to reach U.S. by 2010

By Kirby Chien

BEIJING (Reuters) - The first Made-in-China Chrysler cars, built by local partner Chery Automobile Co., could reach the United States or Europe within 30 months, as ambitious Chinese rivals race to penetrate the world's big auto markets.

Ten-year old Chery, Geely Automobile (0175.HK: Quote, Profile, Research, Stock Buzz) and Brilliance China Automotive Holdings (1114.HK: Quote, Profile, Research, Stock Buzz) CBA.N already export to developing markets, but have had little success in mature markets where competition is more intense.

The two partners will develop, manufacture and distribute Chery-made small and sub-compact cars in North America, Europe and other major automotive markets under Chrysler brands.

The first exports will be a Dodge model, but will not be to the U.S. or Europe.

"The first product within one year, and then into the United States and Western Europe within two to 2-½ years," Chrysler Group Chief Executive Tom LaSorda told reporters on Wednesday at a ceremony marking the strategic alliance.

Chrysler needs a partner to help develop small cars because of the cost of designing, making and marketing a vehicle in a segment where prices and margins are small, analysts said.

"I would say there are endless possibilities," said LaSorda. "We are looking at multiple approaches," adding that volumes could be "maybe 50,000 or 100,000 and maybe more" depending on the region.

But like the Koreans and Japanese before them, the price advantage enjoyed by Chinese exporters is offset by poor quality, outdated design and the lack of brand recognition.