Fiat Eyes Full Jeep Production in China with Guangzhou Partner
Fiat is in talks with Guangzhou Automobile Group to manufacture the entire Jeep portfolio in China, aiming to boost sales in the world’s largest car market.
Fiat is negotiating with Guangzhou Automobile Group to manufacture all Jeep models in China, aiming to localise production for the world’s largest car market. The move would mark a major shift for the Jeep brand, which has not been built in China since 2009, when Chrysler’s previous local arrangement ended following Fiat’s takeover.
Mike Manley, chief operating officer for Fiat and Chrysler in Asia, said the company is considering whether to localise the full Jeep portfolio or select models. The company sees “very significant” volume potential in China and is reviewing both current capacity and the possibility of expanding local production. Jeep’s return to Chinese manufacturing would be through Fiat’s joint venture with Guangzhou, which already produces other Fiat models for the local market.
Jeep’s growth ambitions in China
Chrysler’s global sales climbed 22% to 153,154 units in the first nine months of 2012, with Jeep accounting for 117,189 units, an increase of 54% year-on-year. The brand’s strong performance in Asia is helping to offset declining sales in Europe, where Fiat has warned of ongoing difficulties. Jeep is central to the group’s plan to sell 500,000 vehicles annually outside North America by 2014.
Localising Jeep production would allow Fiat to sidestep China’s steep import tariffs and respond more quickly to local demand. It would also align Jeep with other global brands that have expanded Chinese manufacturing, including Volkswagen and Peugeot. For Guangzhou Auto, a broader Jeep line-up would add a strong SUV offering to its portfolio, competing directly with rivals already building SUVs in China.
Implications for Fiat and Chrysler
Fiat’s push in China comes as the group faces weak demand in Europe and seeks to maximise the potential of its global brands. By producing Jeeps locally, Fiat and Chrysler can reduce costs, improve margins and better compete with established joint ventures. The company’s approach mirrors strategies by other international carmakers, such as Nissan’s plans to assemble Renault vehicles in China and Peugeot’s localised 3008 production.
- Fiat and Guangzhou are reviewing existing plant capacity for Jeep production.
- Local manufacturing would allow for model adaptation to Chinese preferences.
- The plan is part of a wider effort to increase non-North American sales.
Chrysler’s earlier joint venture produced Jeeps in China until 2009. The new talks suggest a return to local assembly, but Fiat has not confirmed a timeline or which models would be first. The decision will likely depend on the outcome of ongoing negotiations with Guangzhou and the Chinese authorities.
If agreed, the move could see Jeep’s full line-up, from the compact Compass to larger models, built for Chinese buyers, giving the brand a stronger foothold in a market where SUVs remain in high demand.
