Fiat, Chrysler announce deal for China production

New vehicle to be made in China with no plans for export to U.S.

Wang Xia, president of the Guangzhou Automobile Group, speaks with members of the media about future Jeep production.

DETROIT -- Fiat Group SpA and Chrysler Group LLC announced today that they have signed an agreement with Guangzhou Automobile Group Co to expand their cooperation on passenger car manufacturing -- including that of Jeeps -- and sales in China.

The companies jointly sent out a news release timed with Guangzhou's press conference at the North American International Auto Show. The release said the agreement was signed at Chrysler Headquarters in Auburn Hills.

Mike Manley, Jeep brand CEO and Chrysler's chief operating officer for Asia Pacific, was on stage with Guangzhou officials, but did not make any comments or address the media following the conclusion of the press conference.

After the press conference, Zeng Qinghong, CEO of Guangzhou, said his company would begin building Jeeps in China next year.

"We're going to make the new product ... in China," he said through an interpreter.

"There's no intention in the near future of sending them to the U.S.," Mr. Zeng said.

Chrysler CEO Sergio Marchionne said Monday that the Jeeps being made in China would be for the Chinese market.

"I can't build them (in North America) because I can't make it work economically," Mr. Marchionne said.

Chrysler officials had said previously that it was planning to build Jeeps in China, but that it would not move production from U.S. facilities to China.

One of Jeep's former parent companies, American Motors, formed a joint partnership with a Chinese company to build Jeep Cherokees in China in the 1980s. The joint venture continued under various ownership groups until it ended with Chrysler’s 2009 bankruptcy.

China is the world's largest automobile market.