Fiat and Guangzhou reaches deal to build three new Jeep vehicles in China

Article by Andrew Christian, on April 23, 2014

Fiat Group is planning to commence production of Jeeps in China by late 2015 following an agreement with local partner Guangzhou Automobile Group. Chrysler said in a statement that Fiat and Guangzhou Auto will build three new Jeep vehicles in Guangzhou, China. The Fiat- Guangzhou Auto joint venture will soon finalize its production plans, which could include a Jeep designed to appeal to Chinese consumers.

The venture will allow Jeep to resume output in China after terminating production in the country in 2006. Taking advantage of the surging global demand for Jeep is part of the growth strategy of Fiat chief executive Sergio Marchionne as he marries the Italian carmaker with Chrysler.

Marchionne said in a statement that joint venture agreement represents the “next chapter in the proper utilization and expansion on a global scale” of the Jeep brand. Marchionne is eyeing to sell over 1 million Jeep deliveries globally this year, reflecting at least a 36-percent surge from 731,565 SUVs sold in 2013.

Chrysler, Fiat and Guangzhou Auto reached a groundwork deal in January 2013 to produce Jeep models in China. The China government separately green-lighted plans of the Chinese and Italian partners to spend CHY4.7 billion ($755 million) in a new site that could produce 60,000 vehicles annually.

Fiat and Guangzhou Auto already produce the Viaggio sedan together in China, with plans to add Ottimo output this year. Marchionne stated in March that the merged company -- Fiat Chrysler Automobiles NV -- may eventually increase annual deliveries by up to 55 percent to 7 million vehicles, as boosted by Jeep's gains. [source: Bloomberg]

Topics: fiat, jeep, china, production

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