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Jeep’s Global Growth to Speed Up

Chrysler’s quest to turn Jeep into a larger global brand will accelerate now that Fiat has completed its acquisition of Chrysler, CEO Sergio Marchionne said last week.

Until Fiat’s acquisition of Chrysler closed this month, Jeep’s plan to expand in Brazil and China was delayed by a dispute between Fiat and the UAW Retiree Medical Benefits Trust.

Now, production on a Jeep model for Brazil could begin by 2016 at Fiat’s new plant in Goiana, in the northeastern state of Pernambuco, according to Just-Auto, an online industry publication.

“We’ve been holding up the involvement of Chrysler in that venture now for a long period of time,” Marchionne said. “The resolution of the ownership has allowed us to now move at the speed of light to allow Jeep to come in and effectively co-own the investment with Fiat.”

Marchionne also said Fiat and Chrysler expect to complete a deal with Guangzhou Auto by March 30 that would enable them to assemble Jeeps in China. Expanding Jeep’s sales into emerging markets is one of Fiat’s three highest priorities, along with reintroducing Alfa Romeo and Maserati in the United States.

In China, Chrysler has worked on an agreement with Guangzhou Auto since at least January 2013. Plans to build Jeeps in China in a joint-venture with Guangzhou were slowed by disagreement over where the Jeeps would be built, according to media reports.

Fiat already has a joint venture with Guangzhou in Changsha, where it makes a small car called the Viaggio. But Guangzhou preferred to assemble Jeeps about 430 miles north of Changsha in its home province of Guangzhou. The final agreement must be approved by the Chinese government.

Now, the partners have agreed to produce Jeeps at more than one location, Mike Manley, Jeep CEO and head of Chrysler’s International Operations, told the Detroit Free Press.

“I absolutely want to see a resolution (of the agreement with Guangzhou) in the first quarter,” Manley said.

With new vehicle sales expected to exceed 21 million in China this year, Jeep needs to re-establish itself in the world’s largest car market.