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Chrysler Reportedly Near Completing China Jeep Manufacturing Deal

Although a de facto single entity, until January 1, 2014, Fiat and Chrysler were formally separate entities, even though they shared a CEO. Now that global operations have now been merged under the guise of Fiat Chrysler Automobiles, any existing concerns about complications with the separate corporate structures of Fiat and Chrysler have been essentially eliminated. With an officially merged management structure and balance sheet, Fiat Chrysler Automobiles CEO Sergio Marchionne said the company has been working hard over the last 60 days to finalize a deal with Guangzhou Automobile Group to start producing Jeeps in China for local sale, according to Automotive News reports.

Chrysler has made no secret that one of the pivotal brands in its global growth strategy is Jeep. Traditionally, the majority of Jeep models have been made in the U.S. and exported abroad. But many rapidly-growing car markets such as China still have highly punitive policies toward imported cars, essentially forcing foreign manufacturers to partner with local affiliates to build models for local sale. Fiat Chrysler and Guangzhou Auto are planning on building a $771 million factory in Guangzhou in southern China with a production capacity of 60,000 units per year.

Jeep brand CEO Mike Manley said both the Cherokee and the recently-introduced Renegade compact crossover are leading candidates to be built in Guangzhou for the Chinese market. Although Manley was optimistic that the deal would be eventually approved, he warned that after a lot of experience doing business in China, he has learned to be patient in waiting for formal approval.