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Published: Wednesday, 1/29/2014 - Updated: 5 months ago

Jeep plans to build version of Cherokee at China plant

BY TYREL LINKHORN
BLADE BUSINESS WRITER

Jeep intends to build a version of its Cherokee sport utility vehicle at a joint venture plant in China, company officials confirmed Wednesday.

There are no plans, however, to build Cherokees in Brazil, where the company is also working to establish a new production plant. Toledo has been home to all Cherokee production since it began last summer.

When Jeep might start building a Chinese Cherokee is unclear. Officials with Fiat and Chrysler have recently said they are close to finalizing a deal with Guangzhou Automobile Group to build Jeeps for the Chinese automotive market, but have not said how quickly production might ramp up. Jeeps were built in China from the mid-1980s until 2009.

China is now the world’s largest automotive market and figures to play a significant role in the company’s lofty goal of selling 1 million Jeeps worldwide this year. Last year Jeep sold about 732,000 vehicles worldwide.

Wednesday’s comments from Sergio Marchionne, the chief executive officer of Fiat and Chrysler, are the first official word on Jeep’s plans to build the Cherokee outside Toledo.

However, Mr. Marchionne’s comments seemed to hint that the vehicle may be tweaked for the Chinese market.

“It’s a version of the Cherokee,” he said on a conference call with analysts. “The Jeep brand is capable of doing ... more than the Cherokee, but it is a version off that platform.”

Currently, the Cherokee is built in Toledo and shipped to world markets, including China. The company has said the Cherokee will eventually be sold in 150 countries.

Mr. Marchionne and other company officials have said the Jeep Wrangler will not be built anywhere but Toledo.

Expanding the Jeep brand beyond North America has been a central theme of Mr. Marchionne’s leadership. He said Wednesday that the company plans to begin building Jeeps in Brazil next year.

“Neither the Cherokee nor the Grand Cherokee will be produced in Brazil. We’re talking about smaller segment cars,” he said. “Everything else that comes into Brazil will be an import out of the U.S.”

U.S. sales of the Cherokee have gotten off to a fast start. The vehicle went on sale at the end of October. Through the end of the year, Jeep sold almost 26,000 in the United States. Worldwide sales totaled more than 29,000 last year, the company said Wednesday.

Mr. Marchionne said he wanted to see a few more months of sales data before providing any larger sales projections.

“It’s doing well and I don’t want to jinx it with a forecast,” he said.

However, Mr. Marchionne did say that dealer orders have been very strong.

“Obviously we have high expectations,” he said. “The plant in principle can make about 240,000 cars a year for global distribution.”

The Toledo Assembly complex built a record 223,039 Wranglers in 2013, and officials are hopeful they might be able to squeeze a few more out this year.

Officials have gone on the record that they hope total production in Toledo will exceed 500,000 vehicles this year. They’ve said production elsewhere won’t affect how many vehicles are built in Toledo.

Jeep production in China became an issue in the 2012 presidential campaign, after Republican candidate Mitt Romney suggested Chrysler was looking to move Jeep production to China. At the time, Jeep officials said they would consider building cars in China, but they wouldn’t move U.S. production there.

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



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