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Chrysler close to deal to build Jeeps in China

TMCNet:  Chrysler close to deal to build Jeeps in China

[January 14, 2013]

Chrysler close to deal to build Jeeps in China

Jan 14, 2013 (Detroit Free Press - McClatchy-Tribune Information Services via COMTEX) -- Fiat is close to reaching an agreement that would allow Chrysler to build Jeeps in China at a plant owned by Guangzhou Automobile Group. "We have had some very fruitful discussions with Fiat's partner," Mike Manley, Jeep president and CEO, said today at the North American International Auto Show in Detroit. "There will be news very shortly." Once there is an agreement Manley said it could take up to two years before actual production would begin. Manley declined to say which Jeep models Fiat and Chrysler would produce in China. The plant has initial annual capacity of 140,000 cars and is capable of eventually assembling 500,000 vehicles per year. Production of the Fiat Viaggio compact car began in June.

In 2009, Chrysler and Fiat CEO Sergio Marchionne identified Jeep and Alfa Romeo as the two brands with global potential for the combined Fiat Chrysler and set a goal for Jeep to reaching annual sales of 800,000 by 2014.

Fiat and Chrysler also plant to build a subcompact Jeep SUV at Fiat's Melfi, Italy plant and will export it to North America and other markets. Marchinne said the subcompact Jeep SUV will go on sale in 2014.

"The car that is being built in Italy is a car that doesn't exist in the current portfolio for Jeep," Marchionne said Monday at the auto show.

Marchionne said it made financial sense to build the small Jeep SUV in Italy because Fiat has extra plant capacity there and because the subcompact model is expected to sell in higher volume in Europe and other global markets than it will in the U.S.

"Fiat has the architecture in its current state...in Melfi," Marchionne said. "It would cost us a lot more to do this within Chrysler." the jeep SUV is built on the same platform as the Fiat Punto, Marchionne said.

In 2012, Jeep sold more than 700,000 SUVs worldwide, the most in its history.

During the U.S. presidential election, Chrysler came under fire from Republican presidential candidate Mitt Romney, who accused Chrysler of planning to move Jeep production to China.

Chrysler strongly denied those allegations and has said that it is not planning to move or reduce any of its U.S. production capacity.

In fact, Chrysler just added a third crew of 1,100 workers at its Jefferson North Assembly Plant in Detroit in October to boost production of the Jeep Grand Cherokee and Dodge Durango.

This fall, Chrysler is adding 1,105 workers at its plant in Toledo to build the replacement for the Jeep Liberty.

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