Chrysler Strikes Deal to Build Jeeps With Chinese Partner

Detroit — With strong name recognition and now a respected Chinese partner, Jeep is ready to get back in the thick of the world’s largest auto market.

Last week, Fiat and Chrysler Group announced a deal with Guangzhou Automobile Group that is expected to lead to resumption of Jeep production in China for the first time since 2006.

The Chinese government must approve the deal before the partners can build a compact Jeep SUV by the end of 2014 and several more models in the next five to 10 years.

“From my perspective, we need to get to production as soon as possible,” said Jeep CEO Mike Manley.

In 1983, Jeep became the first U.S. automaker to sell vehicles in China. But Chrysler’s former owner Daimler pulled out of the country in 2006.

China has become the largest automotive market in the world and any automaker with ambitions of being a global player must have a manufacturing presence there.

In 2012, 19.3 million cars and trucks were purchased in China, or nearly 5 million more than in the U.S. Jeep sold 73,697 SUVs in Asia last year — a 94 percent increase over 2011, but it is only a minor player.

“We have very strong brand recognition in China,” Manley said. “We are well known, and well liked, and therefore the opportunity is pretty significant.”

Chinese regulations require that Western automakers that wish to produce vehicles in China do so with a joint venture partner. Guangzhou, which has joint ventures with Toyota, Honda and Fiat, is among several state-run automakers. Automakers generally prefer to make vehicles in the regions where they sell them to keep production costs down.

The agreement with Guangzhou was signed Tuesday at Chrysler’s headquarters in Auburn Hills, Mich., by Zeng Qinghong, general manager and CEO of GAC Group, and Manley. The news was announced at Guangzhou’s news conference at the 2013 North American International Auto Show.