updated 9/25/2006 9:42:39 AM ET 2006-09-25T13:42:39

DaimlerChrysler AG is mulling whether to sell cars made by China's Chery Automobile Co. Ltd. in the United States through its Chrysler group, a German magazine reported Monday, a move that could help the company meet demand for more fuel-efficient cars from American consumers.

News magazine Der Spiegel, which did not cite any sources, said the German-American automaker is in talks with the Chinese company about licensing its small, fuel-efficient cars for sale under the Dodge brand in the United States as demand for its SUVs and larger models wanes.

DaimlerChrysler spokesman Thomas Froehlich had no comment on the report. Chairman Dieter Zetsche said earlier this month that the company was talking to potential Chinese partners about possibly producing a lower-cost model for U.S. markets.

Zetsche made the remark Sept. 15 as DaimlerChrysler formally opened its first factory to make Mercedes-Benz and Chrysler sedans in China. The factory in suburban Beijing is part of a $1.9 billion investment in the country.

Wang Wei, the manager in charge of publicity for Chery's General Manager's Office, said he was unaware of any such talks.

"I have no idea about the cooperation you mentioned," he said.

Trevor Hale, a spokesman for DaimlerChrysler (China) Ltd., said he knew of no agreement.

"As far as I know, there is not an agreement with anybody," he said.

Stuttgart-based DaimlerChrysler has projected Chrysler's third-quarter loss would be $1.52 billion — more than twice what it had previously anticipated.

In response, the company announced plans to slash retail deliveries by nearly 24 percent in the third quarter, following the lead of Ford Motor Co. and General Motors Corp., which previously announced production cuts in response to slow sales of trucks and SUVs.

Chrysler is cutting retail shipments in the quarter that ends Sept. 30 by 90,000 vehicles to 290,000 vehicles. It had originally planned to ship 380,000.

The company plans to knock another 45,000 units off its schedule in the fourth quarter. For the second half, retail shipments will be cut by 16 percent to 705,000 vehicles from the previous target of 840,000, Chrysler said.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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