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Chrysler Crisis

Chinese Cars to Be Sold under Dodge Brand

Rising gas prices have meant sluggish sales for Chrysler's gas-guzzling SUVs and pick-ups. The company is now looking to China for a fuel-efficient compact. Chery Automobile Co. and Chrysler have reached an agreement.

DaimlerChrysler head Dieter Zetsche may have found a way out of the crisis plaguing the US company Chrysler: Import Chinese cars and sell them under the Dodge brand. Zetsche has reached an agreement with the Chinese automobile manufacturer Chery Automobile Co. Ltd. to import the Chinese compacts to make up for the lack of small, fuel-efficient offerings in Chrysler's fleet. Later, the possibility of producing compacts together will be examined.

Chrysler is making the move to offset falling profits in the pick-up, SUV and minivan sector. Rising gas prices have led consumers to avoid the gas-guzzlers -- which account for 70 percent of Chrysler's revenues. After parting ways with former partners Mitsubishi and Hyundai, Chrysler was left without a partner to help it fill the fuel-efficient compact niche.

Earlier this month, Zetsche said DaimlerChrysler was discussing possible cooperation in the production of low-cost models with potential Chinese partners. Critics within the company are concerned whether the Chinese cars are of high enough quality. China's automobile industry has been growing rapidly in recent years.

Chrysler's third-quarter loss has been projected to be €1.2 billion, over double previous estimates. The company plans deep cuts to production in response.

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