Bricklin expects deal with Chery despite Chrysler

DETROIT, Oct 2 (Reuters) - Entrepreneur Malcolm Bricklin on Monday said he expected to close a delayed deal with Chery Automobile even as the Chinese automaker finalizes the terms of a partnership with auto giant DaimlerChrysler AG.(DCXGn.DE: Quote, Profile, Research)

DaimlerChrysler has also acknowledged discussions with Chery, in a move toward a tie-up analysts said could jump start the Chinese automaker's efforts to crack the U.S. market and boost its credibility.

People familiar with Chery's plans said last week that the upstart automaker was in late-stage negotiations with DaimlerChrysler to make a new small car for export.

DaimlerChrysler has been looking for a partner to build a new subcompact car expected to be modeled on the sporty Dodge Hornet concept car that the company showed off earlier this year.

Chrysler executives have repeatedly said they expect to announce that small-car partnership by the end of the year, saying the company could not go it alone in that low-margin part of the market.

But Bricklin said a DaimlerChrysler deal with Chery would not prevent the Chinese automaker from negotiating a separate joint-venture with Bricklin's Visionary Vehicles to sell cars in the United States.

"It has nothing to do with it," he told Reuters in a telephone interview. "Based on the information I have, all they're doing with Chrysler is building a car under the Chrysler name."

Bricklin grabbed headlines with his plans to bring Chinese made cars to the U.S. market, but his venture has faced repeated delays and deep-seated skepticism from industry analysts.

In September, Bricklin, best known for bringing the low-cost Yugo to America, said his ambitious plans to import a range of Chinese made vehicles had been delayed until the end of 2008 at the earliest.

Although he had said then he expected that a joint-venture agreement between his firm and Chery was "imminent," he indicated on Monday that the final deal could slip by several more weeks.

Bricklin said he still expected to conclude a joint venture agreement by the end of the year.

Bricklin said last month that he had signed 50 dealers to sell the Chery-made vehicles, which he has pitched as a lower cost alternative to luxury brands such as BMW, Audi and Mercedes.

A deal between Chery and Chrysler, he said, could build credibility for Chinese-made vehicles in the U.S. market, Bricklin said.

"I think it's a very smart move on Chrysler's part," he said. "And it's a nice way for Chery to get involved with some major companies."