TOKYO -- Chrysler LLCs fragile overseas operations are largely thrown into limbo by the carmakers bankruptcy filing and alliance with the Italian automaker Fiat S.p.A.
Chryslers international subsidiaries, including ventures in Mexico and Canada, are not part of the Chapter 11 filing. And company officials in Asia say it will be business as usual.
But what does business as usual mean now?
The parent company has sought court protection, is halting production for up to two months and is handing partial ownership to a former rival automaker that already has an extensive overseas reach.
Ultimately, the question will be: Do they make financial sense and fit into Fiats plans? Chris Richter, an auto analyst with CLSA Asia-Pacific Markets, said of Chryslers overseas operations. Or, does it make more sense to sell them off and use the money for other purposes?
China is a showcase for the quandary.
The worlds second-biggest auto market is seen as the key to future growth for most car companies. General Motors is expected to try to hold on to its profitable Chinese operations if the automaker enters bankruptcy.
Daphne Zheng, spokeswoman for Chryslers Asia-Pacific division, said the bankruptcy wont affect operations there. But Chryslers China business is small and shrinking.
In the first quarter, Chrysler sold about 3,600 vehicles in China, down roughly a quarter from a year earlier. Tariff-burdened imports accounted for more than half of those sales.
A Chrysler deal to produce cars with Chinas Chery Automobile Co. and export them to America collapsed in December. Another partnership to share technology, components and distribution channels with Great Wall Motor Co. is on hold.
Chryslers sales arent much better in Japan. They dropped to 5,318 in 2008 from 6,036 in 2007, and those numbers include gray-market imports. European sales were higher at 90,438 in 2008, down 24.4 percent but still not near mass volume.
The tallies amount to just a fraction of Chryslers North American sales of 1,792,255 in 2008.
Overseas Chrysler dealers say Chapter 11 status will only make matters worse.
What worries me most is how customers are going to take it since the bankruptcy is widely reported, Takaaki Naruse, head of Fukuoka Chrysler, told Automotive News. The store is Japans top-selling dealership.
With production slated for shutdown, other dealers worry about having enough inventory.
Chrysler Japan says it will keep shipping replacement parts and honoring warranties. U.S. headquarters has not earmarked any of the countrys 60 Chrysler outlets for closure, said company spokeswoman Kaori Beppu.
Still, Naruse isnt taking any chances in spooking customers with the B word.
To wipe away any anxiety, we are now making a leaflet to explain the situation to our customers, he said. We have about 5,000 customers, and our staff will visit each one of them.
Chieko Tsuneoka contributed to this report