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Chrysler, Fiat Reach Accord to Make Jeeps in China

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Jan. 16 (Bloomberg) -- Chrysler Group LLC and its majority owner Fiat SpA reached a preliminary agreement with joint-venture partner Guangzhou Automobile Group Co. to make Jeep sport-utility vehicles in China for sale in that market.

The agreement was signed yesterday at Chrysler’s Auburn Hills, Michigan, headquarters, according to a statement. The accord would require Chinese national and regional government review, and Jeep would aim to begin sales within two years of approval, Mike Manley, the brand’s chief, said in an interview this week at the Detroit auto show.

Sergio Marchionne, chief executive officer of Chrysler and Fiat, is positioning Jeep as one of the main global brands for both automakers. Marchionne, 60, plans to expand Jeep by adding production of its SUVs in China, Russia and Italy to current output at plants in Michigan, Illinois and Ohio.

Marchionne reiterated this week that production of Jeeps in the U.S. won’t be affected by the addition of output in other markets.

Jeep is Chrysler’s top-selling worldwide brand. The company is updating three models this year to build on 2012’s global sales record. The 2014 Grand Cherokee, Patriot and Compass SUVs will add newly available transmissions that help boost fuel economy for all three models to as much as 30 miles (48 kilometers) per gallon in highway driving, Chrysler has said.

Jeep’s worldwide sales last year climbed 19 percent to 701,626 sport-utility vehicles, Chrysler said last week. The brand topped its previous record of 675,494 set in 1999. U.S. deliveries totaled 474,131 in 2012, accounting for 68 percent of total Jeep sales.

To contact the reporter on this story: Craig Trudell in Southfield, Michigan at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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