DETROIT (AP) — DaimlerChrysler AG's Chrysler Group and China's Chery Automobile Co. have agreed on a plan for the Chinese manufacturer to build small cars to be sold worldwide.

The cars, which already are being designed, would be based on an existing model but will be modified jointly by Chrysler and Chery engineers, Chrysler spokesman Jason Vines said Friday. Chrysler is taking the lead on the design and will ensure that the vehicles meet high quality standards, he said.

They will be sold at Chrysler dealerships in the United States, Europe and elsewhere under a Chrysler Group brand as either a Dodge, Chrysler or Jeep.

Chery will build tiny cars known in the industry as "B-cars," but it also may build something larger for Chrysler, Vines added.

The deal needs to be approved by Chrysler's supervisory board, which meets next month, and by the Chinese government.

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The move gives Chrysler a relatively quick entry into a growing segment of the car market where it now has no significant product, and it prepares the company in case gasoline prices escalate again to above $3 per gallon, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. The average retail price of gasoline in the U.S. ended 2006 at around $2.34 a gallon, or 14 cents higher than a year ago.

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