SHANGHAI — Steven Xu didn't sell a single Chrysler 300C last month. But by local standards, he's an optimist, just because he kept the doors open at Yueye Chrysler during the October National Day long weekend.

"Not so good," the business manager of the suburban Shanghai dealership says of sales of the 300C, the larger of two Chrysler cars now made in China.

Nearby Shanghai Syncar — a Chrysler store across the Huangpu River in a rundown suburban neighborhood — didn't even bother trying. Unlike most area car dealerships, which stayed open during the fall break in an effort to make up for a lackluster month during the Olympics, Shanghai Syncar kept the doors closed.

A sun-faded advertisement for the 300C is peeling off the glass at the front of the Shanghai Syncar showroom. On the rain-streaked shop sign above the main entrance, the colors inside the Chrysler logo have washed out completely.

Like its Syncar showroom in Pu-dong, Chrysler has seen better days in China. In the world's second-biggest auto market, the American automaker lags far behind U.S. rivals General Motors and Ford Motor Co.

Chrysler's Asia CEO, Phil Murtaugh, is trying to rebuild momentum. But sales are small, he lacks a Chinese production partner, Chrysler's vehicle lineup is poorly suited for China, and help from headquarters is slight because of Chrysler LLC's plummeting sales in North America.

Chrysler's most immediate problem is that it lacks a joint venture with a Chinese carmaker. Those partnerships are crucial for building sales and production.

Chrysler sold only 8,207 cars in China in the first six months of this year. Over the same period, General Motors China sold 261,443 and Ford Motor China sold 89,117.

Murtaugh declined to be interviewed for this report.

Stifled by Daimler

Chrysler's weakness in China is a dramatic reversal.

In 1987 it was the only U.S. automaker with a Chinese joint venture, after its purchase that year of American Motors. In 1983, AMC had signed a deal with Beijing Automotive Industry Holding Co. establishing Beijing Jeep Corp. to produce SUVs in China.

Chrysler transferred its stake in that valuable venture — then called Beijing Benz-DaimlerChrysler Automotive Co. — to DaimlerChrysler in 2005. When Daimler and Chrysler split up in 2007, Chrysler was left out in the cold.

Beijing Benz now makes two sedans each for Mercedes and Chrysler. Chrysler's two models, the 300C and the smaller Sebring, are produced under license.

An insider at Chrysler says the decision to end Chrysler's only China joint venture was pushed through by a board dominated by German executives.

"Under DaimlerChrysler, Chrysler was only ever seen as the U.S. unit of a global company," says the Chrysler employee. "When it came to expansion into China, Chrysler's needs took a back seat."

Daimler spokesman Trevor Hale did not reply to requests for comment.

Tough sell

Chrysler cars are a tough sell in China. From the day that Beijing Benz started making the 300C in 2006, Chrysler's big, American-style gas-guzzler was up against European luxury marques with far stronger brand appeal in China.

The smaller Sebring, launched this year, entered a segment dominated by the Volkswagen Passat, Honda Accord and Toyota Camry.

In the first six months of this year, Chrysler sold 5,590 Sebrings, compared with 79,059 Camrys sold over the same period. Only 888 units of the 300C were sold.

The launch of the two vehicles was woefully underfunded, says analyst John Zeng of Global Insight. That adds credence to the charge that in China, Daimler's interests came first.

For the 300C, no money was invested to reduce the vehicle's noise, vibration and harshness or to redesign a more subdued interior to suit Chinese tastes. "Chrysler has been the only company to make a U.S. vehicle without any changes to suit the Chinese market," Zeng says.

In 2007, Chrysler licensed Fujian-based Soueast (Fujian) Motor Co. to make two minivan models. So far, sales are minimal. In the first six months of this year, Chrysler's Dodge Caravan sold 1,441 units in China, while its Grand Voyager sold 288 units.

Chrysler is looking for another joint venture partner. In July 2007 the automaker signed a "strategic co-operation agreement" with Chery Automobile Co. The aim was to produce a small car under the Chrysler brand for export to Mexico and eventually the United States. No time frame was announced.

Since then, Chrysler has made no announcements. Chery declined to comment on the matter.

Partner needed

In July 2008, Chrysler signed a memorandum of understanding with a second Chinese automaker, Great Wall Motor Co., to share technology, components and distribution channels. Chrysler spokeswoman Daphne Zheng acknowledges that this is a "very preliminary agreement."

To add to this, Chrysler needs production in China to follow the paths of GM and Ford in developing local suppliers. Once it has worked with those suppliers to raise quality to international standards, Chrysler can export the cheap Chinese components to lower the company's global production costs.

Chrysler has two factors working to its advantage. The first is its highly regarded Asian CEO, Murtaugh, who set up GM's successful operations in China.

Then there are China's local carmakers, suffering from falling market share amid perceptions of inferior quality. Many are as desperate as Chrysler to find a foreign partner to improve their products and brand image.

Yet Chrysler China's parent company now faces plummeting U.S. sales, along with strained supplier relations and a product portfolio weighted heavily toward unpopular large vehicles.

At industry consultants J.D. Power and Associates, analyst John Bonnell says the automaker will struggle to grow in two countries at once.

"Chrysler has its hands full with problems in the U.S.," Bonnell says. "They'll find it hard to marshal the resources they need to build a business here."