Fiat Near Deal to Resume Jeep Production in China

Fiat SpA reportedly is close to agreement to build Jeep SUVs in China after local production ended there in 2009.

Bloomberg News says Fiat and 50:50 partner Guangzhou Automobile Group Co. plan to begin making Jeeps next year in Guangzhou. Earlier media reports say the first model is likely to be the just-introduced Jeep Cherokee.

Chrysler and Guangzhou Automobile said in January they had reached preliminary agreement about Jeep production in China but offered no details. The Chinese government later announced it had approved a plan by the two companies to build a $770 million factory with initial annual capacity of 60,000 vehicles.

Chrysler gained control of Jeep when it bought American Motors in 1987. Fiat, which now owns 58.5% of Chrysler, is eager to produce Jeep vehicles locally because taxes on imported models make the SUVs roughly three times as expensive as in the U.S.