Jeep to Manufacture in China for Domestic Market

Chrysler Group LLC and Fiat SpA have recently made known their intention to tap into what is currently considered to be the largest automobile market in the world, by entering into an agreement with Guangzhou Automobile Group to increase their presence on passenger car manufacturing and sales in China, including the iconic Jeep. President of the Guangzhou Automobile Group Wang Xia attended the recent North American International Auto Show in Detroit, USA, using the occasion to make the announcement, which was accompanied by joint news releases from the American and Italian automakers.

Jeep brand CEO Mike Manley was with officials from Guangzhou Automobile Group when the announcement was made at the auto show. While the specific model is as yet unknown, Guangzhou will build one Jeep model in China under license to Chrysler. The Jeep will only be sold in China’s domestic market, and will not be exported to other countries. In an interview following the news conference, CEO of Guangzhou Automobile Group Zeng Qinghong noted that the Chinese auto manufacturer would begin production of the Jeeps in 2014, confirming that the cars would be for China’s domestic market.

Fiat, which owns around 60 percent of Chrysler, began manufacturing the Fiat Viaggio in China in September. With imported Jeep sales topping 50,000 in China during 2012, a great demand is anticipated for locally made Jeeps, which won’t be subject to the high tariffs China places on imported vehicles. Chrysler CEO Sergio Marchionne gave his assurance that the company would not be moving its production from the United States to China, citing China’s high tariffs as a barrier to producing the SUVs in the US and exporting to China.

In the 1980s, American Motors, one of Jeep’s previous parent companies, was producing Jeep Cherokees in China in a joint venture with a Chinese company. This continued for a time under various agreements, until the 2009 bankruptcy of Chrysler. The Jeep brand is well known, and much sought after, in China.

Meanwhile, the Chinese-made Honda Fit is proving to be a success in Canada. Made by the Honda Motor Co. Ltd. in China, the Fit’s sales climbed from 2,835 in 2011 to 4,736 in 2012.