Article published November 06, 2009
Jeep exports face barriers
Tariffs, trade policies drive up price in other countries
By LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER
Chrysler Group LLC may dream of exporting hundreds of thousands of Wranglers and Liberties from its Toledo Jeep Assembly complex one day, but experts say there may be obstacles to overcome before that can happen.
Tariffs, taxes, and trade policies internationally can all help to drive up the cost of Toledo-made Jeeps in other countries, making them less competitive in what has become a crowded field of SUVs.
In some markets, such as China, the cost of a Wrangler can be double what a comparable vehicle would sell for in the United States, Chrysler officials said.
Still, Fiat SpA's global manufacturing operations and global dealership network is likely to make it far easier for Chrysler to sell Jeeps in some large and untapped markets such as Latin America and Europe.
"It depends on where they sell them and who they sell them to, but generally, if [an automaker] builds cars in a country, you're generally allowed to import other vehicles as well," said Jim Hall, a longtime automotive industry analyst who owns 2953 Analytics in suburban Detroit.
"Generally speaking, it's probably manageable. Europe is less of a problem than elsewhere, but it depends on the country," Mr. Hall said. "But if you find 10 countries, you probably have 11 different importation regulations to deal with to import cars."Chrysler's overseas sales have long lagged those of Ford Motor Corp. and General Motors Co. In 2008, Chrysler sold 214,826 vehicles outside North America, compared to Ford's 3 million overseas sales and GM's 4.1 million, according to industry sales data.
But those SUVs don't carry a Jeep nameplate, and Chrysler's new management team - especially Michael Manley, the new president and chief executive for the Jeep brand - believes the "original" SUV still has the cachet to carry the day in markets like Europe and Latin America.
"Me and my team believe now is the time … to take Jeep back to what we consider its historically rightful place as being the global SUV brand," Mr. Manley said Wednesday during Chrysler's seven hour rollout of its five-year plan.
Mr. Manley, who heads Chrysler's international sales efforts outside of Canada and Mexico, said he hoped to push the brand's global sales rates to 800,000 units by 2014, up 61 percent from the 2008 figure. To do that, he said, international sales of Jeep brand vehicles would have to grow dramatically from the estimated 67,000 vehicles the company is likely to sell overseas in 2009.
Indeed, Chrysler's overseas sales plan, which will utilize Fiat's international dealer network, calls for just two brands in each market where it will sell vehicles: Jeep, and either Chrysler, Dodge, or Ram-branded trucks, depending on the circumstance.
Bruce Baumhower, president of United Auto Workers Local 12, which represents workers at the Toledo Jeep Assembly complex, said Chrysler's efforts to sell 800,000 Jeeps worldwide in five years could mean 1,000 more jobs at the facility down the road.
"If they want to sell 800,000 vehicles, we can build 400,000 of them," Mr. Baumhower said.
Contact Larry P. Vellequette at:
lvellequette@theblade.com
or 419-724-6091.
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