Chrysler seeks partner for China, says talks progress

BEIJING (Reuters) - Chrysler LLC is discussing joint ventures with a number of potential Chinese partners, including Chery Automobile, in a bid to return to producing vehicles at its own plants in China, executives said on Sunday.

The company aims to become one of the top 10 competitors in the industry's biggest boom market, they said.

"We're having discussions with several potential partners. Those discussions are ongoing," said Phil Murtaugh, who became chief executive of Chrysler's Asian operations last year.

Chrysler representatives also said the privately held No. 3 U.S. automaker was still working with Chery to modify one of its small cars so that it could be ready for export from China.

Murtaugh declined to specify a timeframe for concluding that work and clearing the way for what had been expected to become one of the first Chinese-made cars to be sold in large volumes in developed markets such as the United States.

"I don't think we're too far away, but neither of us is ready to say let's go yet," said Murtaugh, speaking to reporters on the sidelines of the Beijing Auto Show. "We're working to make sure the product's right."

Chrysler announced a tie-up with Chery last year as part of a bid to reduce its reliance on trucks and SUVs by giving it a subcompact car to sell under one of its own brands.

But when progress in readying the Chery-built vehicle stalled, Chrysler turned to Nissan Motor Co, and this month announced a production swap under which Nissan will build a subcompact in Japan using a Chrysler design starting in 2010.

Murtaugh said that Chrysler and Chery were reviewing safety-related issues such as body structure in order to ensure that the resulting China-built vehicle could be marketed successfully overseas.