Fiat Near Deal to Make Jeeps in China?

Fiat SpA is close to finalizing a plan with Guangzhou Automobile Group Co. to build Jeep Cherokee SUVs in China, according to Bloomberg News.

The program has been awaiting regional and national government clearances since Fiat and GAC announced the scheme in January. Jeep brand CEO Mike Manley has estimated production could begin about two years after the plan is approved.

The partners aim to make the Cherokee at the underutilized factory they opened in Changsha earlier this year. The facility has capacity to make 140,000 vehicles per year but could be expanded to 300,000 units. The plant began making the Fiat Viaggio small sedan in June, but sales to date have been disappointing.

Bloomberg says Fiat believes the aspirational Jeep brand, which belongs to affiliate Chrysler Group LLC, would be more successful in China than the Italian company's mass-market models.

Chrysler assembled Jeeps in China at its Beijing Jeep venture between 1985 and 2009. Production stopped when Daimler AG acquired Chrysler.