Putt-Putt Cars Coming Soon

The first Chinese cars could arrive in the U.S. in less than two years and be sold under an American brand name. Chrysler Group, the U.S. unit of DaimlerChrysler AG, said Friday that it has signed a letter of intent with Chinese manufacturer Chery Automobile Co. for Chery (pronounced "cherry") to build a small car that Chrysler will market in North America, Europe and elsewhere.

Chinese factories have the latest machine tools and assembly robots, plus the benefit of an extraordinarily low wage structure: less than $2 an hour, compared with about $28 an hour in U.S. plants.

Chery gets the benefit of coming to the U.S. under DaimlerChrysler's wing. Dodge is the brand most likely to sell the car, a subcompact that will be smaller and cheaper than the $13,575 Caliber, the smallest in the Chrysler Group lineup.

The company did not give details on the car or say when it would go on sale, but spokesman Jason Vines said it would arrive faster than the typical three-year lead time, meaning as soon as 2008.

Chrysler thus jumps to the head of the line to sell a Chinese vehicle in the U.S.

"It's inevitable that the Chinese will sell in the U.S. It's a matter of who and when," said George Peterson, president of industry forecaster Auto Pacific.

Peterson says the arrival of Chinese cars does not signal doom for the U.S. auto industry, but it will heighten the pressure to build vehicles at lower cost. He sees other domestic manufacturers following Chrysler and import vehicles from China.

"With the legacy costs they're carrying, that could force those companies to look offshore for more production," he said.

Peterson predicts that Chinese cars could start selling in "substantial volumes"--tens of thousands per year--by 2011 or 2012 in the U.S.

---- Also investing in China's booming auto industry are entrepreneur Malcolm Bricklin and the investment banking firm Allen & Co. Allen & Co., a blue-chip Manhattan is an investment firm whose clients include Disney, Coca-Cola, Universal Studios and billionaire investor Warren Buffett.

Bricklin is founder and CEO of the firm Visionary Vehicles.

Hopefully, 'made in China' cars, will partner with Wal-Mart's customer service desk to make returns for refund or exchange easier.