Fiat Chrysler Automobiles (FCA) and Guangzhou Automobile Industry Group Co., Ltd. (GAC) have announced a preliminary agreement that would expand cooperation in a joint venture to include the production of a Chrysler brand vehicle in China.
FCA and GAC have agreed to bring a localised Chrysler product to China, adding it to the existing Fiat brand offering. GAC Fiat will have access to the Fiat and Chrysler brand products announced during the FCA May 2014 Investor Day. Product announcements will be made at a future date, FCA said.
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GAC Fiat also reaffirmed its commitment to a full sport-utility vehicle (SUV) offering through the Jeep brand with the localised production of three new Jeep models by the end of 2016. By 2018, the company claims the Jeep brand will have “one of the most complete SUV portfolios in China ranging from subcompact SUVs to full-size luxury SUVs”.
In addition, the preliminary agreement includes the separation of commercial and industrial activities. The distinct entities will provide support and management in working toward the successful launch of the approved product plan, including the introduction of a second vehicle plant in Guangzhou.
A joint commercial operation will be established that will be responsible for all Sales, Marketing, Product Planning and Aftersales development of Jeep, Fiat and Chrysler brands. This operation will have responsibility for both locally produced and imported products.
The industrial operations based in Changsha will continue to support both the Changsha and Guangzhou vehicle and powertrain manufacturing plants. This industrial group will retain responsibility for all GAC Fiat manufacturing activities including assembly, quality, product engineering and supply chain management.
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By GlobalDataAlso as part of the preliminary agreement, GAC and FCA will work on distribution network expansion required to support the development of SUVs through Jeep and passenger cars through the Fiat and Chrysler brands.
“China is a market of strategic importance to FCA in the next five years,” said John Kett, General Manager of Fiat Chrysler APAC and Head of the Jeep Brand APAC, Fiat Chrysler Automobiles.
“This plan will accelerate our volume and market share growth at significant speed, and will enable us to deliver the commitment that we laid out on this year’s FCA investor day by growing our sales volume in China to 760,000 by 2018.”
