DETROIT — Fiat Group SpA and Chrysler Group LLC on Tuesday announced an agreement with Guangzhou Automobile Group to expand their cooperation on passenger car manufacturing, including Jeeps, and sales in China.
The companies’ joint news release was timed with Guangzhou's announcement at the North American International Auto Show.
Under the agreement, Guangzhou will build one Jeep model in China for Chrysler for sale in China. A specific model was not announced.
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 at the conclusion of the event.
After the news 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.
Guangzhou began building the Fiat Viaggio in China last September. Fiat owns about 60 percent of Chrysler.
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.
One reason for that is that China places high tariffs on imported vehicles.
The Obama Administration last year filed an unfair trade complaint with the World Trade Organization, accusing China of putting illegal duties on $3.3 billion worth of U.S.-made auto imports.
Despite that, Jeep sold about 50,000 SUVs in China last year.
Chrysler had said 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.
The Blade's wire services contributed to this report.