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Fiat Chrysler Automobiles has started production of its Jeep Cherokee in China for its Chinese market. It plans to start producing two more Jeep models there next year.
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Jeep assembly starts in China

ASSOCIATED PRESS

Jeep assembly starts in China

Cherokees made for foreign market won’t be sold in U.S.

Fiat Chrysler Automobiles said Monday that it has begun producing the Jeep Cherokee at its joint-venture plant in China, a big step forward in the company’s ambitious plan to grow its Jeep brand in what has become the world’s No. 1 new car market.

Full-scale production is expected by November, with the first deliveries of Chinese-made Cherokees going to consumers there before the end of the year.

Adding localized production has been a major part of Fiat Chrysler’s strategy for taking advantage of Jeep’s worldwide popularity. Company officials have said they want to be able to build 900,000 Jeeps a year outside of North America by the end of 2018.

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Getting production up and running in China — something that’s been years in the making — is an important first step.

“Today marks a milestone in the history of our brand,” Jeep brand president Mike Manley said in a statement. 

“Local production allows us to be closer to our customers and to improve our competitive position in the marketplace.”

Until now, all Jeep Cherokees have been produced at the Fiat Chrysler’s Toledo Assembly Complex, and the added capacity in China isn’t expected by analysts to have any impact on the Toledo plant. 

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There have been trade industry reports that the company plans to move Cherokee production out of Toledo to a plant in Belvidere, Ill., to give the Toledo complex room to build more Jeep Wranglers.

A Fiat Chrysler spokesman said Monday the company has no plans to sell Chinese-made Cherokees anywhere but China.

At current exchange rates, the Chinese-built Cherokees this year are to cost between $31,500 and $47,000.

Fiat Chrysler sold more than 236,000 Cherokees last year. The vast majority — 178,500 — were sold to customers within the United States. An additional 22,500 went to Canadian buyers, while more than 4,400 were sold to buyers in Mexico.

Sales figures for the Cherokee in China weren’t immediately available, though China does represent the Jeep brand’s strongest market outside of the United States. Jeep sales were up 49 percent in China last year.

The idea of making Jeeps outside the United States still has a bit of a political tinge following the 2012 presidential election in which Republican nominee Mitt Romney erroneously claimed Jeep was moving all U.S. production to China.

However, Fiat Chrysler officials have repeatedly said foreign production will supplement, not replace, U.S. work, and analysts have said it wouldn’t make sense to import Chinese-made Jeeps to the United States.

Additionally, the pending agreement between the United Auto Workers and Fiat Chrysler includes a promise not to outsource any production work, and employment at the Toledo Assembly Complex is guaranteed during the four-years of the agreement. UAW members are voting on the agreement this week.

 

In the case of China, Jeep is actually returning. In 1985, under American Motors Corp. ownership, Jeep began building Cherokees in China for the Chinese market.

Fiat Chrysler builds the Jeep Renegade in Brazil for the South American market, and officials announced this year the company will invest $280 million into a joint venture plant in India that’s scheduled to build Jeeps. 

Officials said Monday two more Jeep models are expected to be built in China by next year, including the Jeep Renegade.

The Renegade being sold in the United States is made in Italy.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134 or on Twitter @BladeAutoWriter.

First Published October 20, 2015, 4:00 a.m.

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Fiat Chrysler Automobiles has started production of its Jeep Cherokee in China for its Chinese market. It plans to start producing two more Jeep models there next year.  (ASSOCIATED PRESS)
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