BEIJING - The chief executive officer of the Chrysler Group has said that DaimlerChrysler was still in talks with China's Chery Motors over a deal on building small cars.

"We're in discussion with a couple of companies including Chery ... we hope to have our discussions completed by the end of the year," Chrysler chief Tom LaSorda told reporters on the sidelines of the Auto China 2006 show on Saturday.

The chief executive officer of the Chrysler Group Tom LaSorda (R) poses with a Chrysler 300C at the Auto China 2006 in Beijing. LaSorda has said that DaimlerChrysler was still in talks with China's Chery Motors over a deal on building small cars. [AFP]

LaSorda confirmed the talks were on building small, B-class size cars but declined to give further details.

German magazine Der Spiegel reported in September that the company was talking to Chery about licensing its small, fuel-efficient cars for sale in the United States.

The Chrysler Group had said it was interested in developing a small subcompact vehicle with help from a partner, and that it was talking with several Chinese automakers about the possibility of establishing a joint venture.

Chery Motors has been aiming to enter the massive and highly competitive US market with small, fuel-efficient cars priced 30 to 40 percent below current offerings.

But analysts have warned that US consumers still have quality concerns about Chinese cars.

Chery Vice President Jin Yibo on Saturday confirmed that the two companies were engaged in talks but declined to elaborate.

"Chery very much hopes to enter the European and American markets but it is a rather long process and we haven't set ourselves a timetable," he told AFP.

"Entering the United States will be something in several years time -- it's too early to say now."

Jin estimated that Chery would export 50,000 vehicles by the end of 2006, compared with 18,000 last year, mostly to its current markets in the Middle East, Southeast Asia, Latin America and Africa.

Meanwhile, Chrysler's LaSorda said his company aimed to triple its sales in China to 100,000 units in three or four years' time.

"We need to triple our sales, that would be an easy task over next few years."

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