Chrysler LLC is accelerating its development in China by beginning a long-term strategic business relationship with China's Great Wall Motor Co, the company said yesterday.

The United States' third largest car maker said in a statement that it has signed a memorandum of understanding with its Chinese partner to share a distribution network and work jointly on spare parts and technological capabilities.

"The MOU represents part of Chrysler's ongoing efforts to explore opportunities to expand its involvement in the development of China's car industry, as well as growing Chrysler's global business through the right partnership,'' the statement said.

Chrysler lagged behind rivals, such as General Motors, Volkswagen and Toyota, in China's rapidly expanding vehicle market, lacking a strong partnership with domestic car makers.

Great Wall, the nation's major manufacturer and exporter of sport-utility vehicles, will be the second partner for Chrysler in China.

The US car maker, now owned by Cerberus Capital Management LP, signed contracts with China's Chery's Automobile Co Ltd last year to produce compact cars under the Chrysler nameplate for sale in the US.

Rumors

The US car maker is also reported to be talking with Chery, China's largest maker of home-branded vehicles, about a car manufacturing venture. But no progress has been revealed at this stage although there have been rumors that models made by Chery failed to meet Chrysler's quality standard.

Chrysler has been in talks with several Chinese car makers in an attempt to speed up development in the world's second largest car market to compensate for a weaker home market.

Shang Yugui, a spokesman for Great Wall, said negotiations were initiated in January.

Chrysler set up its first car venture in China in 1983 with Beijing Automotive Industry Holdings Co, making Jeep SUVs.

(Shanghai Daily July 4, 2008)