Jeep Close to Building SUVs in China

DETROIT  – Fiat is close to building Jeep vehicles in China for the market there, two senior executives tell reporters at the North American International Auto Show.

CEO Sergio Marchionne says the auto maker is “in the process of finalizing the agreement now. These are Jeeps that are designed to deal with the Chinese market. I can’t build them here because I can’t make them work economically.”

Separately, Jeep-brand President and CEO Mike Manley says the auto maker is in talks with Chinese auto maker Guangzhou, which already has a partnership with Fiat.

“We’ve been talking to them for quite a long period of time from a potential partner perspective. They’re certainly one of the best. Talks have progressed well,” he says.

Manley says at least one Jeep vehicle always will be built in the U.S. – the Wrangler. “You can rule that one out” as a candidate for production in China, he says.

Marchionne echoes that sentiment, adding Grand Cherokee manufacturing will remain in the U.S. “There’s a couple of pillar points in the Jeep brand that can never be moved out. One of them is Wrangler and the other one is the Grand Cherokee.

“Those things will continue to be as American as apple pie forever, despite what some people in the Republican Party felt,” he says, referring to the 2012 presidential campaign’s verbal scuffle over alleged plans to move Jeep production entirely to China.

Manley says the E-segment Grand Cherokee is doing well in the country, while the C- and D- sport/utility segments have the most potential for further growth. The Liberty’s D-segment replacement is forthcoming, and the C-segment Compass now is on the market.

“If you look at what we do in China today, we have Wrangler, Grand Cherokee and Compass. They’re doing phenomenally well, but all of the SUV segments in China have grown ahead of the industry growth, which is really phenomenal,” Manley says.

“We’re relatively small in the biggest market in the world,” he says, noting Jeep has plans to “grow incrementally” in the country.

Top Guangzhou executives sat with Marchionne and other Chrysler executives during the unveiling of the new Grand Cherokee. But, Manley says, “I’ve nothing to announce today.”

He does say Jeep is on target to deliver 800,000 vehicles worldwide in 2014. Last year, the brand delivered 701,626 units, up from its record 675,494 set in 1999.

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