Chrysler now faces the possibility of running out of money before the end of the year and the deal with the Chinese car manufacturer had to be put on hold until Chrysler gets the loan it's applied for ($7 billion) as part of the Detroit 3 bailout plan.
"The economic situation and market environments around the world have changed significantly since the agreement was signed," Chrysler executive vice president Michael Manley said in a statement.
Executives from both companies announced the end of their agreement after Cerberus Capital Management LP bought 80.1 percent of Chrysler, a situation caused by the changes in strategy and external market condition.
The Chinese market that was known for unvast capabilities is now being faced with massive drops of sales, around 27.7 percent this year. Numerous rumors have reported that both companies are suffering from rapid downfall of car sales and money problems.
Chrysler is looking at joining another Chinese manufacturer, Great Wall Motor Co. as the companies agreed on purchasing and swapping parts in an effort to reduce costs in production and manufacturing.
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