Marchinonne's Flirt With New Chinese Jeep Partner Might Slow Down Jeep In China – Again
Fiat might be looking for another Chinese joint venture partner to manufacture Jeeps, Fiat CEo Sergio Marchionne told Reuters. “In China we have a good partner, and we have the possibility to use a second one to develop Jeep,” Marchionne said.
Late to the Chinese market, Fiat established a JV with Guangzhou Automobile Group (GAC), a company that also has JVs with Toyota and Honda.
Chrysler wants to produce over 100,000 new Jeeps in China, :in a move that is key to Fiat’s goal of selling 300,000 vehicles annually in China by next year,” as Reuters says,
Marchionne told Reuters that Chrysler is not currently in talks with a partner for Jeep, but added that “there have been a number of expressions of interest.”
An overseas automaker can pair up with up to two Chinese joint venture partners, but not more. The approval process is long and byzantine, and is far from guaranteed, if Saab, Hummer, and Subaru are an example. If Marchionne wants to produce 100,000 Jeeps in China by next year, then it is much too late to cast about for new joint venture partners, and doing so could slow down a very promising relaunch of Jeep in China, which, frankly, should have been undertaken much earlier.
BAIC’s B40
SUVs are one of the most rapid-growing segments in China, and Jeep is a very strong brand in the Middle Kingdom. Jeep, when owned by AMC, was the first company to start a JV in China. Established in 1984, it actually predated the venerable Volkswagen-SAIC JV by a few months. In the hands of Chrysler, then DaimlerChrysler, then Chrysler again, the Chinese JV deteriorated from neglect. Finally, in 2009. Chrysler pulled out.
Jeep better get its act together in China. “Beijing’s Jeeps look better than Jeep’s” wrote Chinacartimes after looking at BAIC’s brutish B40. Later, the website reported that the “forthcoming Jeep Cherokee really doesn’t seem to do anything for Chinese consumers.”
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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The Beijing Jeeps may look good on the floor of the exhibition center, but in recent years they have yet to go beyond the display stage, into production. So there's no competition from there to worry about. BAIC currently seems preoccupied with banging out its line of Saab-based sedans, so the timing for Fiat's Jeep is right.
It's been quite some time since we've had any further news on this. This could just be Sergio's way of sending a message to their current partners indicating that they have other options. Who knows, perhaps negotiations have bogged down on cost sharing and technology ownership. Jeep is truly a jewel in Fiat/Chrysler's crown. Sergio needs to play his best cards wisely.