Chrysler signs car deal with China's Chery

DETROIT, Dec. 29 (UPI) -- Chrysler said Friday it has struck a deal with a Chinese automaker to build small cars for Chrysler that will be sold worldwide, including the United States.

Chrysler Group's deal with Chery Automobile Co. still required approval from Beijing and DaimlerChrysler's supervisory board, a spokesman said.

If the deal is approved, Chery will start making subcompact cars for Chrysler "soon," spokesman Jason Vines told The Wall Street Journal.

Chery will likely make cars marketed under Chrysler's Dodge brand. The deal was critical to Chrysler's plans to compete in the growing global small-car market, the newspaper said.

Sales of subcompact cars accounted for barely 1 percent of the overall U.S. vehicle market in 2005, but growing numbers of U.S. consumers have bought them in 2006 because of increasing concerns over gas prices.

Nine-year-old Chery -- a fast-growing automaker in the eastern Chinese city of Wuhu -- has said it wants to enter the U.S. market on its own.