Final Deal on Jeep Production in China Due This Month

Fiat Chrysler Automobiles NV says it could reach final agreement by the end of March to relaunch Jeep SUV production in China perhaps in 2015.

The company and Guangzhou Automobile Group Co. agreed late last year to build Jeeps at a new, 4.7 billion-yuan ($766 million) factory near the Chinese carmaker's headquarters in Guangzhou, according to a Bloomberg News report in December, which cited unnamed sources. The facility will have initial capacity to make 60,000 vehicles annually.

Fiat earlier proposed to make Jeeps in its underutilized year-old factory in Changsha, some 400 miles north of Guangzhou. That facility, which makes the slow-selling Viaggio small sedan, can assemble 140,000 vehicles per year.

Jeep Brand CEO Mike Manley tells Automotive News the Guangzhou facility is likely to make the recently introduced Jeep Cherokee along with the smaller Renegade mini-SUV unveiled last week at the Geneva auto show.

The production deal had been stalled by Guangzhou Automobile's concerns over the minority stake in Chrysler held by a union healthcare trust fund. CEO Sergio Marchionne says the issue was resolved in January when Fiat acquired 100% of the American company.

The former Chrysler Corp. assembled Jeeps in China for 24 years through its Beijing Jeep venture. Production stopped in 2009 when Daimler AG acquired Chrysler.