Fiat to Start Making Jeeps in China by Late 2015

Fiat SpA plans to begin making Jeep sport utility vehicles in China, the largest market for the brand outside the U.S., by late 2015 after reaching an agreement with local partner Guangzhou Automobile Group Co.

Fiat, the Italian carmaker that bought full control of Jeep producer Chrysler Group LLC, and Guangzhou Auto will produce three new Jeep vehicles in the southern city of Guangzhou, Chrysler said yesterday in a statement. The joint venture will soon finalize its production plans, which includes the consideration of a Jeep model uniquely designed for China, the company said.

The project will enable Jeep, which in 1983 became the first foreign auto brand to be assembled in China, to restart production in the world’s largest car market after ending output there in 2006. Tapping into rising global demand for the SUV nameplate is part of Fiat Chief Executive Officer Sergio Marchionne’s growth strategy as he merges the Turin-based manufacturer with Auburn Hills, Michigan-based Chrysler.

“Today’s announcement represents the next chapter in the proper utilization and expansion on a global scale of the Jeep brand,” Marchionne said in the statement. “Equally important is our continued development in the Chinese market with an established and respected partner such as Guangzhou Automobile Group.”

Marchionne, 61, is targeting more than 1 million Jeep deliveries worldwide this year, amounting to a jump of at least 36 percent from the record 731,565 SUVs sold last year, as the brand adds models. The Renegade, a small SUV based on the underpinnings of Fiat’s 500L subcompact that was unveiled at the Geneva auto show in March, will be built at Fiat’s plant in the southern Italian town of Melfi.

Government Clearance

Chrysler, Fiat and Guangzhou Auto reached a preliminary accord in January 2013 on building Jeep models in China. The country’s government separately approved the Chinese and Italian partners’ plan to invest 4.7 billion yuan ($755 million) in a new factory with capacity to build 60,000 vehicles a year. Fiat and Guangzhou Auto, based in the southern Chinese city of that name, already build the Viaggio sedan together in the country and are adding the Ottimo hatchback this year.

Marchionne said in March that the merged Italian-U.S. manufacturer, to be called Fiat Chrysler Automobiles NV, may eventually boost annual deliveries from today’s figures by as much as 55 percent to 7 million vehicles, helped by Jeep’s growth. The company is unlikely to produce Jeep’s large Grand Cherokee model or smaller Wrangler in China, but “anything in between is possible,” the CEO told shareholders.

— With assistance by Tommaso Ebhardt, and Alexandra Ho

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