Fiat-Chrysler’s Jeep – the automotive brand at the centre of the first joint vehicle manufacturing venture between western and Chinese automakers – will soon once again be made in China, a media report said.
Fiat, now majority owner of the Chrysler Group, plans to start making Jeeps in China and might eventually make all of its models in the country, the head of both carmakers’ operations in the region told the South China Morning Post.
Mike Manley, chief operating officer of Fiat and Chrysler in Asia, said Fiat was in “very detailed conversations” with Chinese partner, Guangzhou Automobile Group, on making Jeeps in the world’s biggest car market. Chrysler has not built Jeeps in China since Fiat took control in 2009.
“The volume opportunity for us is very significant,” said Manley, who is also president of the Jeep brand. “We’re reviewing the opportunities within the existing capacity” as well as whether the company “should localise the entire Jeep portfolio or some of the Jeep portfolio”, he said.
Jia Xinguang, chief analyst at China Auto Consultancy Group, told the Post Fiat and Chrysler would consider moving some of Jeep’s production to China because the SUV was popular in that market.
Jia said that although car sales had slowed on the mainland in recent years, demand for SUVs was still strong.
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“Last year, total car sales in the country grew 2.45% but the SUV segment grew 20.2%,” he said.
Jia said mainland consumers preferred SUVs because they were seen as trendy and cool. And, even though major cities were afflicted with traffic jams and fuel prices kept rising, “consumers don’t care about these factors”.
But Jia said it would be impossible for Chrysler to build all its Jeeps in China.
“The US is still a very important market for them,” he said.
“Chrysler has no factory in China so, if they want to manufacture cars, they will have to use the Fiat factory located in Changsha, which doesn’t have enough capacity.”[Changsga recently began producing the Fiat Viaggio, a spin-off of Chrysler’s new Dodge Dart sedan – ed]
Otherwise, Chrysler would need to build its own plant but that would take time and involve lots of procedural issues, Jia said.
Fiat’s joint venture Guangzhou Automobile plant in Changsha, in central China, has an initial annual capacity of 140,000 cars, with the provision of expanding it to 500,000 vehicles per year.
Chrysler is relying on growth in China to counter the weakness in Europe’s car market. It is targeting annual sales of 500,000 outside North America by 2014, more than triple its overseas deliveries in 2009.
International sales for Chrysler climbed 22% to 153,154 in the first nine months of the year, according to the company.
The Jeep brand accounted for more than three out of every four of those deliveries, with sales surging 54% to 117,189.
According to a Wikipedia article, Jeep, then owned by American Motors, first put vehicles into production in China in 1984, after five years of negotiations between the US firm and Chinese automakers and government authorities. Beijing Jeep Corporation had become China’s first Sino-western automotive joint venture when established in 1984. Early model lines included the compact (by US SUV standards) Cherokee and, later, the larger Grand Cherokee.
Almost six years after talks on the joint venture had begun, the first Cherokee rolled off the assembly line on 26 September 1985. Assembly of the Cherokee continued after Chrysler’s buyout of American Motors as did production of Beijing BJ212-based SUVs.
Some Chrysler models were subsequently added to the Chinese company’s product line including the Jeep Grand Cherokee, Mitsubishi Pajero [Shogun] Sport, and Mitsubishi Outlander. Chrysler left the joint venture in early 2009.
During Chrysler’s short-lived partnership with Daimler, parent of Mercedes-Benz Cars, it was decided that the American company’s Chinese joint venture would produce Mercedes-Benz-branded products. Beijing Jeep became Beijing Benz-DaimlerChrysler Automotive with the then German chancellor Gerhard Schroeder a guest at the 2004 naming ceremony. While Chrysler was removed from the company in 2009, it remained in its legal name for several more years.
The company started producing the Mercedes-Benz E-Class locally in 2006 and the C-Class in 2008. Manufacture of Chrysler-branded models continued until at least 2008. This included the 300C, which was both locally produced and imported.
Last December, BAIC and Daimler said they would begin exports of a locally developed and built long wheelbase version of the Mercedes E-class but did not specify target markets. Production had started in China in March, 2010.
That announcement came just a few weeks after Beijing Benz said it had started production of the Mercedes GLK compact SUV.
It also builds a long wheelbase version of the C-class passenger car which competes with similarly stretched, locally-built versions of BMW’s 3-class built by a JV with Brilliance.