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Published: Tuesday, 4/23/2013 - Updated: 1 year ago

Cherokee to be built in China

Chrysler to produce newly designed model by end of 2014

BLOOMBERG NEWS

SHANGHAI, China — Chrysler Group LLC’s newly redesigned Jeep Cherokee is the “obvious choice” to become the first Jeep built in China in six years and could double the brand’s sales there, said Mike Manley, head of the sport utility line.

Jeep, which became the first western auto brand built in China in 1983, may resume Chinese production by the end of next year at a plant in Changsha, Mr. Manley said over the weekend at the Shanghai Auto Show. The Cherokee, which is on display at the show, will go on sale in the country at the end of this year as an imported vehicle, he said.

Mr. Manley said Jeep production in China would not replace or reduce production at its U.S. plants, which include Toledo.

Chrysler, controlled by Fiat SpA, is eager to expand its Jeep brand in China, where it is profitable and where sales more than doubled last year to 46,000 units.

Jeep has remained so popular in China it spawned a clothing line sold at more than 200 retail stores. That outnumbers Jeep’s 160 auto dealers in China, which Mr. Manley said he plans to double in two years.

“Jeep is a premium brand here,” Mr. Manley said, noting the high-end Jeep Grand Cherokee SRT8 sells for $205,000 in China, three times more than it fetches in the United States. The new Cherokee “could double our volume here.”

The Cherokee will sell in the midsize SUV category in China, which had 1.2 million in industrywide sales last year and is forecast to grow by 10 percent annually, Mr. Manley said.

The model, which received mixed reviews for its styling in the United States, has been well received in China, Mr. Manley said.

“There was no controversy in China,” he said. “They thought it was great.”

SUVs and luxury cars are the fastest-growing categories in China, as newly affluent consumers seek to show off their wealth.

“SUVs are considered a status symbol of what you’ve achieved so far in your life,” Mr. Manley said.

China last year became Jeep’s second largest market, surpassing Canada and trailing only the United States. The compact Jeep Compass was the brand’s top selling model in China in 2012, accounting for 33,000 of its 46,000 sales.

Building Jeeps in China will allow the brand to avoid import duties, which drive up prices and lower sales, Mr. Manley said.

Jeep hopes to receive Chinese government approval for domestic production by the middle of this year, he said.

That would enable production to start by late 2014.



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