Competition is really heating up one size below, in the B-class segment. Until recently, Korean manufacturers had the market segment to themselves. The Hyundai Accent and Kia Rio were battling against the Korean-made Chevrolet Aveo. Then Toyota brought in its Yaris and Honda came in with the Fit.
The contracts haven't been finalized yet, but Chrysler has decided to turn to a Chinese manufacturer for its entry in this market. The vehicle, possibly something like the Dodge Hornet concept shown here, will be built by China's Chery car company. Still to be decided are issues like whether the car will be engineered by Chrysler Group or Chery and whether it will be introduced elsewhere in the world first - like China - before coming here.
Relying on China to introduce a small car could be a dangerous strategy for Chrysler, though, said David Zatz, editor of the Chrysler Group watchdog site Allpar.com.
If the Chinese car isn't good, that will obviously be bad for Chrysler. But if it is good, and consumers learn they can trust a Chinese manufacturer, Chrysler could be offering a hand up to one more potential competitor, said Zatz.