Jeep Sticks to China Expansion Plan Amid Market Turmoil

  • CEO Manley seeks to more than double China sales this year
  • Brand to start local production of two more SUVs in 2016

Jeep is sticking to its plan to expand production in China with two more sport utility vehicles locally built this year amid market turmoil in the country.

The Fiat ChryslerAutomobiles NV unit, which in November began making its Cherokee model in China, plans to start building the smaller Renegade there in the second quarter and a new mid-sized SUV at the end of the year as it moves away from being purely an importer, the segment that’s struggling the most, said brand chief Mike Manley.

“While we are not immune to pressures in China, we are moving away from the part of the market which suffer the most,” Manley said in an interview at the Detroit auto show. “Our competitive position is going to improve dramatically.”

With three products built locally, Manley said he expects Jeep to at least double sales in China this year from 89,000 in 2015, when it sold mostly imported vehicles. Jeep’s expansion in China is a critical part of Fiat Chrysler Chief Executive Officer Sergio Marchionne’s plan to boost the brand’s global deliveries to 2 million in 2018 from 1.2 million in 2015, its fourth consecutive record year.

Amid China’s woes and a 30 percent decline in Fiat Chrysler’s sales in Brazil last year, Marchionne is shifting spending to the fast-growing Jeep division at the expense of investments in the Alfa Romeo and Maserati marques. The CEO plans to give an update of the carmaker’s five-year plan at the end of the month. He said in December that Jeep will play a central role in the strategy.

The carmaker plan to produce about 500,000 Jeeps in Asia by 2018, according to a December presentation posted on its website.

Marchionne confirmed on Monday that London-based Fiat Chrysler plans to boost profit to 5 billion euros ($5.4 billion) in 2018 from a forecast of about 1.2 billion euros in 2015. He withheld from committing to his earlier goal of boosting sales by almost 50 percent to 7 million cars.

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