Can Chrysler Rebound in China?

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To support its passenger-car strategy, the company is planning production of its midsize Chrysler Sebring sedan in Beijing. With the 300C acting as its flagship, the company hopes the Sebring will be the model it needs to compete in the volume midsize segment against competitors such as the VW Passat, Honda (HMC) Accord and Toyota (TM) Camry.

Renewed Focus in the Mainland

In addition to its Beijing ambitions, in early 2007 Chrysler formed an alliance with Chery Automobile to build and export a Chery vehicle to the U.S., to be sold under a Chrysler Group brand. While the Chery association does not expand Chrysler's presence in the China market in the short term, it does give Chrysler an "in" with China's best-known and most successful independent automaker. Who knows where the relationship could lead in the future?

Finally, in early September, 2007, Chrysler hired Philip Murtaugh to head its Asian operations, with particular emphasis on its China operations. Murtaugh is a longtime and highly respected China hand, largely credited with driving General Motors' (GM) successful entry into China in the late 1990s and early 2000s, and he most recently served as a top executive at Shanghai Automotive Group. Murtaugh is expected to initially focus on the Chery relationship, but one might think his next assignment would be to augment Chrysler's position in the local market.

It's been a long road for Chrysler in China, and an equally challenging path lies before the company. But after years of wandering aimlessly in the Middle Kingdom, we can say the company has finally chosen a new direction and is moving with a renewed sense of purpose.

Timothy Dunne is director of Asia-Pacific market intelligence at J.D. Power & Associates in Westlake Village, Calif. (J.D. Power, like BusinessWeek, is owned by The McGraw-Hill Companies.) Dunne has 18 years of experience in the global automotive industry, and worked in China and Southeast Asia from 1994 to 2006.