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NEWS
Jeep considers production in China
Iconic US off-road brand aims to counter softening Euro demand by cashing on the high-volume Chinese marketThe strength of the Asian market has prompted Jeep’s Fiat masters to consider returning Jeep production to China, helping offset weakening demand in a struggling European market.
It wouldn’t be the first time a Jeep would be manufactured in China as, during the DaimlerChrysler alliance, Beijing Benz Automotive Co produced the Grand Cherokee and various locally developed products under the Beijing Jeep badge.
Chrysler, of course, exited its alliance with Daimler in 2007, but the company’s Fiat parents now plan to pursue a joint venture in China with Guangzhou Automobile Co.
A Bloomberg report quoted Jeep chief operating officer Mike Manley as saying Fiat is in “very detailed conversations” with Guangzhou Automobile Co about making Jeeps in the world’s largest auto market.
The motivation behind the initiative is to offset weakness in the European car market by cashing in on burgeoning demand in China. The aim is to achieve 500,000 Jeep sales outside North America by 2014, which is more than triple the number it exported in 2009.
Under the current set-up all Jeeps are built in the US, and Manley stressed the proposed Chinese production would supplement US manufacturing, rather than replacing it.
International demand for Jeeps has been strong in recent times, with three of the four Chrysler sales posted outside North America accounted for by the off-road brand. Year-on-year until September, Jeep export sales surged 54 per cent this year to a total of 117,189 vehicles. What’s more, strong demand for the Grand Cherokee and Compass has enabled Jeep to more than double its sales in China through September to 33,463 units.
According to the Bloomberg report, Fiat/Guangzhou’s plant in central China will eventually be capable of assembling 500,000 vehicles per year. The two car-making groups plan to add production of an additional model to the factory roughly every 12 months.
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Written byGautam Sharma
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