DETROIT – Chrysler’s quest to turn Jeep into a larger global brand will accelerate now that Fiat has completed its acquisition of Chrysler.
Until Fiat’s acquisition closed in January, Jeep’s plan to expand in Brazil and China had been delayed by a dispute between Fiat and the United Auto Workers union’s Retiree Medical Benefits Trust.
Now, production of a Jeep model could begin by 2016 at Fiat’s new plant in the Brazilian city of Goiana, according to Just-Auto, an online publication.
“We’ve been holding up the involvement of Chrysler in that venture now for a long time,” Fiat CEO Sergio Marchionne said last week. “The resolution of the ownership has allowed us to now move at the speed of light to allow Jeep to come in and effectively co-own the investment with Fiat.”
Marchionne also said Fiat and Chrysler expect to complete a deal with Guangzhou Auto by March 30 that would enable them to assemble Jeeps in China. Expanding Jeep’s sales into emerging markets is one of Fiat’s three highest priorities, along with reintroducing Alfa Romeo and Maserati in the United States.
In China, Chrysler has worked on an agreement with Guangzhou Auto since at least January 2013. Plans to build Jeeps in China in a joint venture with Guangzhou were slowed by disagreement over where the Jeeps would be built, according to media reports.
Fiat already has a joint venture with Guangzhou in Changsha, where it makes a small car called the Viaggio. But Guangzhou preferred to assemble Jeeps about 430 miles north of Changsha in its home province of Guangzhou. Now, the partners have agreed to produce Jeeps at more than one location, Mike Manley, Jeep CEO and head of Chrysler’s international operations, told the Detroit Free Press. “I absolutely want to see a resolution [of the agreement with Guangzhou] in the first quarter,” Manley said.
With new-vehicle sales expected to exceed 21 million in China this year, Jeep needs to re-establish itself in the world’s largest car market.
Manley said Jeep should sell more than 800,000 vehicles worldwide this year, up from a record 731,000 in 2013.
“China remains such a huge opportunity for us,” Manley said. “Jeep has been the fastest growing brand in China ... but we are still a niche player.”
Sales of the new Jeep Cherokee are meeting or exceeding Chrysler’s expectations as dealers sold more than 25,000 in November and December. The Cherokee launch was delayed by about two months because of transmission issues.
Now, Chrysler is shipping some Cherokees from its plant in Toledo, Ohio, to China. The vehicle should go on sale in Europe by June.
The Cherokee also is part of an expansion that will include the revival of the Grand Wagoneer as a large SUV, a compact Jeep SUV to be made in Italy starting this year and one new model to replace the Patriot and Compass compact SUVs.
A subcompact Jeep could go on sale in the United States before the end of this year, Manley said. Together, Manley hopes the new models will boost Jeep above 1 million in annual global sales.