Jeep production will start in India in 2017 as Fiat Chrysler Automobiles expands its joint venture with Tata Motors. For this move, FCA intends to make a $280 million investment. Last year, CEO Sergio Marchionne revealed his plan to turn around the company. His outline included a move to set high sales targets for brands such as Jeep.
Marchionne has set a goal that by 2018, Jeep sales will be nearly double what was recorded in 2014. Last week, Jeep chief Mike Manley said that the key to being able to achieve this goal is local production for its top markets. In a recent statement, Marchionne said that the investment in India is an “important step” as it seeks to make Jeep products more accessible worldwide.
Jeep, together with Alfa Romeo, is at the forefront of FCA’s expansion plan that could cost as high as $54 billion (48 billion euros). A week ago, Marchionne launched the first of eight new models from Alfa Romeo that will rival its German competition Audi, BMW, and Mercedes-Benz. Western automakers have not been able to penetrate the Indian market.
In the past few years, both PSA/Peugeot-Citroen and Renault have had to stop participating in joint ventures or withdraw from the market altogether. In India, Fiat’s sales decreased by 13% to 10,380 units for the 12-month period that ended on March 31, according to industry data.
The Indian market is a big factor in Jeep's expansion plan since it is expected to become the world's No. 3 biggest auto market behind China and the United States by 2020, according to forecaster IHS Automotive. According to data for the 12-month period that ended on March 31, SUVs make up about 20% of the 2.6 million annual passenger vehicle sales in India.
It can’t be argued that the SUV segment is one of the quickest-growing groups in the world. Automakers like General Motors and Volkswagen aim to unveil SUVs in the Indian market in the next couple of years as it seeks to compete with top models like the Toyota Fortuner.
Fiat Chrysler said that Fiat's plant in the western state of Maharashtra will start Jeep production in the second quarter of 2017. Fiat and Tata already jointly produce cars at this plant. So far, specific production information has not been released.
In the past, Manley had said that Jeep will debut in India in 2015 with the launch of the mid-sized Cherokee and rugged Wrangler SUV. In addition, production in China is slated to start later this year. There are existing assembly lines in the U.S., Brazil, and Italy.