The deal is still subject to approval by the Chinese government but is expected to meet no resistance.

The deal marks the first time that Chinese-designed-and-produced passenger vehicles will be made available to North American consumers. The vehicles, however, will be marketed and sold under familiar DaimlerChrysler brand names.

No timetable was set by DaimlerChrysler as to when the Chery-produced vehicles will be available here.

"Being able to partner with Chery represents a long-term solution to the challenges of how to profitably compete in the small-vehicle segment," said Chrysler Group President and CEO Tom LaSorda. "This supply partnership is part of a new business model that is allowing us to introduce all-new products more quickly, with less capital spending. This announcement reflects the realities of a global industry and DaimlerChrysler’s need to remain competitive in all segments."

DaimlerChrysler said the new vehicles, which will be sold under Chrysler Group brands, will attract new customers in two segments in which the company doesn’t currently compete: very young buyers and entry-level price-point buyers. These small, low-price segment vehicles are especially important in more price- and fuel-economy sensitive markets, including Canadian, Mexican and most European markets.