Stalled Jeep regaining traction

The iconic Jeep was once so well-known in China that all off-road passenger vehicles were known by that name. A three-way agreement between Chrysler, its parent Fiat and Guangzhou Auto calls for local production to resume in the second half of 2014. [Su Zhijun / For China Daily]

Three decades ago was first China-made foreign brand

Three decades after it was first assembled in China, the iconic Jeep will resume production in the county at a joint venture between Fiat SpA and Guangzhou Automobile Group Co.

Chrysler and its majority owner Fiat signed an agreement with GAC last week to expand cooperation in manufacturing and sales, including making Jeeps for the Chinese market.

Fiat and GAC established a joint venture in 2010 that began production last year in Changsha, capital of Hunan province in central China, with its first model the Fiat Viaggio sedan. It also distributes the imported Fiat 500, Freemont and Bravo.

The agreement makes Chrysler the fourth foreign carmaker to build passenger vehicles with GAC. China's sixth-largest auto group by sales also has partnerships with Honda, Toyota and Fiat.

Zeng Qinghong, general manager of GAC, told reporters at the Detroit auto show that Jeep production at the joint venture is likely to begin in the second half of 2014.

He declined to disclose what Jeep model will be first produced, but it is widely believed to be either the Compass or the Patriot, both compact SUVs.

Jeep currently exports the Grand Cherokee, Wrangler, Compass and Patriot to China, where it delivered more than 50,000 vehicles last year.

Comeback

If the joint venture meets the planned schedule next year, it will mark a comeback for the first locally built foreign auto brand in China.

In 1984 the Beijing Jeep Corp, China's first Sino-foreign auto joint venture, was established between Beijing Auto Works, the predecessor of BAIC Group, and American Motors Corp, which owned Jeep at that time.

The brand was once so famous in China that people called all off-road vehicles Jeeps. But problems with the groundbreaking joint venture and disappointing sales of the single model it produced, the Cherokee, led to its demise.

The foreign shareholder in the partnership changed when AMC was bought by Chrysler in 1987 and again in 1998 when Chrysler merged with Daimler.

The brand gradually ceased production at the joint venture in 2006 and offered only imports as DaimlerChrysler AG, its owner at the time, moved to adjust the local product lineup. Chrysler pulled out of the Beijing joint venture altogether in 2009.

Booming SUV market

In addition to the latest plans by Jeep, many carmakers are coveting the booming SUV market in China as they move to expand or establish local production.

Ford Motor Corp will launch two locally produced SUVs - the EcoSport and Kuga - later this month to tap the potential of the segment.

British premium off-road brand Land Rover is preparing to produce its SUVs with local partner Chery Automobile Co in 2014.

French carmaker Renault plans production in China before 2016 with the first model likely to be an SUV.

The SUV segment was the fastest-growing segment in the nation's car market last year with more than 2 million such vehicles sold, a 25.5 percent increase from 2011, according to China Association of Automobile Manufacturers. Total passenger vehicle sales increased just 7.1 percent in 2012.

The three best-selling SUVs last year were the Great Wall Motors Haval, Volkswagen Tiguan and Honda CRV, the association said.

hantianyang@chinadaily.com.cn