Fiat-Chrysler’s production of Jeeps in Russia may start in 2013

Article by Christian Andrei, on March 1, 2012

Fiat-Chrysler’s production of Jeeps in Russia may start in 2013, according to CEO Sergio Marchionne. He spoke to Italian news agencies during an event held by ACEA, the European automakers association, in Brussels last Tuesday. He said that he hopes Jeep production would start by 2013 in one of two Russian plants.

These remarks were confirmed by a Fiat spokesman but no further details were given. Sources told Automotive News Europe that a memorandum of understanding was signed by Fiat and Russian state bank Sberbank to form a new joint-venture that will make and sell Jeep-branded cars in Russia.

For this joint venture, a new 120,000-capacity plant will rise at a location, which may be near St. Petersburg. This factory will produce the Jeep Liberty/Cherokee replacement, which is slated to debut in the U.S. in early 2013. The source said that before the new plant opens, the Grand Cherokee will be built on a contract manufacturing basis from semi-knockdown kits in a Moscow plant owned by truckmaker Zavod Imeni Likhachova (ZIL).

Last year, Jeep sales in Russia increased by 159% to 2,093 units in a passenger car and light commercial vehicle market that has grown by 39% to 2.65 million units, according to the Association of European Businesses (AEB).

Russian sales are expected to grow to 3.2 million units by 2013, according to analysts. Marchionne seeks to increase sales in fast-growing economies to offset the losses incurred in Europe. Ford, Volkswagen and General Motors inked agreements with Russian partners in 2011 for the expansion of its production in the country.

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