Chrysler and Chery small cars put on hold

As both companies continue to run out of money, Chrysler LLC and Chery Automobile Co. have put plans of producing small cars together on hold. Former CEO Tom LaSorda said last year that Chery will supply Chrysler with small cars to sell in the U.S. The two companies were scheduled to bring cars to Mexico later this year.

Sources say that due to limited cash reserves, the program is now on hold and may even be dead. According to Automotive News, insiders say that another major obstacle was the quality of Chery cars. With substandard qualities it would have been tough for Chery vehicles to meet U.S. safety and emission standards.

LaSorda announced in May that the two automakers were having difficulties. The two have never offered an official timetable when Chery cars would come to the U.S. Chrysler is working on a small car with Nissan that is due out in 2010. The car is expected to be a production version of the Dodge Hornet.