Chrysler strikes deal to produce Jeeps in China
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[April 21, 2014]
MILAN (Reuters) — Fiat Chrysler <FIA.MI>
has reached an agreement to start producing Jeep vehicles in China
with partner Guangzhou Automobile Group Co <601238.SS>, the
companies said on Saturday, as Fiat tries to catch up with
competitors in a fast-growing market.
The plan to produce three new Jeep vehicles in China for the
domestic market, through the GAC Fiat joint venture, has received
the necessary government approvals, the companies said.
Production is expected to begin by late 2015.
GAC Fiat is also considering making a Jeep uniquely designed for
China, where the Italian carmaker hopes the successful sport-utility
brand can help it make up lost ground behind long-established
The deal is "the next chapter in the proper utilization and
expansion on a global scale of the Jeep brand," Fiat Chrysler chief
executive Sergio Marchionne said in a statement.
GAC Fiat is establishing a production site in Guangzhou for the Jeep
models, the statement said, without giving a cost.
According to an application to China's National Development and
Reform Commission, GAC Fiat plans to invest a total 4.7 billion yuan
($755.8 million) in a project in Guangzhou. Funding will come from
banks and the company's own equity capital.
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The companies did not say which models would be produced there.
Marchionne has said the Wrangler and Grand Cherokee would not be
produced in China but "anything in between is possible". Likely
models include the Cherokee or the smaller Renegade.
FCA's partnership with GAC is its third attempt to gain a
foothold in China, after terminating previous partnerships with
Nanjing Automobile Group and Chery Automobile Co.
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(Reporting by Isla Binnie; editing by Rosalind Russell)
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