February 15, 2007

China To Buy Chrysler

In a move sure to enrage the "Blame China" crowd in the USA Congress, DaimlerChrysler announed a restructuring of Chrysler indicating that "all options" are open and they are looking for a partner. Almost 10,000 jobs will be lost in the USA adding to the ruinous record of American automakers. In the past year alone, almost 100,000 United AutoWorker jobs were cut, high-wage salaries that will likely never return.

As you heard from us in our very first video report of January 9, 2007, Damilerchrysler signed a joint venture deal with Chery Automobiles of China to sell Chinese cars under a Chrysler brand.

Similar deals are already proving successful such as the Toyota Yaris and Honda Fit, both made in China.

China's auto sector is getting extremely competitive as Chinese carmakers jockey for position into the American market. The industry still needs a lot of consolidation but it is expanding exponentially and China is now awash with cash.

Speculation is that a Chinese company, possibly even Chery, might make an offer Dr. Z can't refuse.

Don't forget, the Chinese already own two famous British brands once the pride of the industry: MG and Rover. The Chinese are adept at accelerating economic and technological growth. It took half a century for Toyota to go from joke (the Crown in 1955) to rival GM in US car sales. An American car company and brand such as Chrysler with dense networks of dealers, suppliers, and services, would be the perfect opportunity for a Chinese auto company to leapfrog ahead.

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