By on August 21, 2013

Fiat-Changsha

You may recall that the possibility of building Jeeps in China (something that actually started decades ago when the brand was owned by American Motors) became an issue in last year’s U.S. presidential election campaign. According to reports in Chinese media, the Fiat and Guangzhou Automobile groups have reached a tentative agreement to assemble Jeeps in the companies’ joint venture Changsha factory in central China.

Citing sources in the Changsha municipal government, Shanghai’s National Business Daily said that a formal agreement will be signed in the next few months. The news follows January’s announcement of a preliminary agreement between Chrysler (which is majority owned by Fiat) and Guangzhou to build Jeep branded vehicles in China. Apparently the two parties, though, disagreed as to which plant would assemble the Jeeps. Fiat-Chrysler wanted to use GAC Fiat Automobile Co.’s factory in Changsha, a JV that it already operates with Guangzhou, while Guangzhou Auto wanted to use it’s own factory in Guangzhou.

Now that the disagreement has been resolved, the Changsha GAC Fiat plant will build Jeeps on an assembly line shared with the Fiat Viaggio compact sedan, which will increase utilization of that facility. It has a capacity of 140,000 units but so far in 2013, GAC Fiat has sold only 20,000 Viaggios.

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43 Comments on “Fiat and Guangzhou Annouce Jeep Assembly in China...”


  • avatar
    PrincipalDan

    Deeeeeeeee tooooooooooook errrrrrrrrrr jeeeeebbbbssssssss!

    Sorry, someone had to say it.

    Whatever, this is the continuation of something AMC did as stated.

    Thank god I don’t still work with a coworker who drover around with teabags hanging from his windshield and a “NOBAMA” bumper sticker. He’d be blowing on about this till his voice ran out.

    • 0 avatar
      Superdessucke

      Talk about getting pistol whipped with your own gun! No American will ever buy a Jeep made by Chinese. Right? Sure they’ll buy Mexican made Dodge Rams but, er…At least the tea bags were hanging from your friend’s mirror and not both sides of his mouth like most Americans.

      I just sit back and wait for the Chinese middle class to grow and wages to increase….

    • 0 avatar
      28-Cars-Later

      Well played, Principal Dan.

    • 0 avatar
      morbo

      tooooooooook rrrrrrrrrrrrrrrrrrrrr joooooorrrrrrrrbbb!!!

      Ah the Global Age. Where my classic American sedan Chrylser 300 was built in Canada from a Mexican engine and German transmission. The Japanese Honda Accord I helped my buddy buy last weekend is designed and built in Ohio from American parts. And WW2 winning Jeep have been owned by three of the four Axis powers, Italy, Germany, and France (yeah I know, the ‘Resistance’, blah blah cheese eating surrender monkeys).

      • 0 avatar
        billfrombuckhead

        At least the Mexicans and Canadians have fair trade with the USA vs JapanInc’s mercantilist practices. If you believe in Adam Smith, reject JapanInc and KoreaInc.

        Canada and Mexico buy plenty of American cars vs Japan which buys hardly any foreign cars let alone let alone have any foreign factories.

  • avatar
    IndianaDriver

    Didn’t Mitt Romney say this would happen.

    • 0 avatar
      sunridge place

      No…Mitt Romney said:

      ‘I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China. I will fight for every good job in America, I’m going to fight to make sure trade is fair.’

      No jobs are ‘moving’ to China and Jeep isn’t moving all production to China.

      • 0 avatar
        28-Cars-Later

        I concur, although I wouldn’t rule out some production capacity or jobs moving to China later down the line.

      • 0 avatar
        FreedMike

        In an election season filled with lies, that was one of the most blatant ones. As I recall, that was a couple of weeks before the election, and I’m sure Romney’s pollsters were telling him nothing good. Probably a desperation move on his part.

        • 0 avatar
          Kenmore

          “I will fight for every good job in America”

          Translation: “Forget your age and all that global competition hooey, I’ll get you back into 80K+ ’cause you’re white.”

          I loved it, but there weren’t enough of us.
          Sad face.

  • avatar
    cc92oct

    So does 20k sales of the Viaggio mean its not popular in the Chinese market? Its a huge market but it has like, 20 other competitors so IDK how to read those 20k

  • avatar
    highdesertcat

    I think it is a good idea.

    I also think that they should assemble the Jeep Grand Cherokee there for Asian sales. In California, visiting Chinese buy a Grand Cherokee upon arriving in the US for their vacation, use it while they sight-see the US, and then ship the vehicle back to China in a container vessel. Happens daily.

    We did the same thing as US military stationed in Europe — buy European cars tax-free there, use them during our tour there, and then ship them home to the US at government expense, except many of us left our old yank tanks behind in Europe.

    • 0 avatar
      danio3834

      They don’t have much choice. If they want to competitvely sell these products there, they’re pretty much stuck buidling them there. IIRC the distinction Chrysler made when all the hoopla started about this last fall was that Chinese Jeeps would be for China/Asia and wouldn’t be displacing Toledo products.

      • 0 avatar
        Superdessucke

        What if the U.S. put the same tariffs on import cars. Would you just sigh and say the Japanese and Europeans are “stuck” building cars here? I think not. Some of you would scream like a little girl!

        • 0 avatar
          highdesertcat

          The name of the game is to make money for the shareholders. And to do that, sometimes hard decisions have to be made, like where to build in order to maximize profits.

          Workers/labor are just a means through which a manufacturer accomplishes something. You can set up shop anywhere, hire locals and make things. The Japanese have been doing it that way in America for decades.

          As far as the Japanese and Europeans building cars in America? I would think they would LIKE to do that because of America’s lower production costs as compared to the production cost in their home country and the weakness of the US dollar.

          If the US and Europe can achieve a free-trade agreement that eliminates the chicken tax (imposed long ago because American poultry products were banned from being sold over there), I believe a lot more European manufacturers would like to set up plants in the Southern, non-union/right-to-work states to build their products here and ship them back to der fatherland under that free-trade agreement.

          • 0 avatar
            Superdessucke

            That’s not the only game. The other game is to have a supply of adequate paying jobs for your population through trade policy. You understand that too right? If you don’t have that, then you get what we have in Chicago now where 6-10 people get shot every night. It’s cause and effect.

            Sometimes corporations just can’t be allowed to solely chase the dollar, and some measure of social obligation must be imposed. China knows that, which is why we “have to” build over there to sell there.

            Your last paragraph makes sense and I can hope something like this materializes.

          • 0 avatar
            highdesertcat

            Superdessucke, “The other game is to have a supply of adequate paying jobs for your population through trade policy. You understand that too right? ”

            I cannot disagree with you more on that, but I will respect YOUR belief.

            Chicago is what Chicago is, was and will be forever more.

            It appears that this “organized community” is falling apart even more than before, but it really never changed from the days before Al Capone.

            And it won’t change in the future either. That’s why it’ll always be the Second City.

            Any city reflects the class of its people. New York does. LA does. Denver does. Atlanta does. New Orleans does. Dallas does. St. Louis does. Miami does. And so does Chicago.

            If any government imposes “social obligations” on manufacturers and employers, they will pack up and leave to find greener pastures elsewhere. Many of them have done just that and moved South of the Border, or to Asia.

            A corporation’s only obligation is to its share holders, or owners. Employees come and go and are just so much fodder. They are free to leave at any time by their own volition and have no claim on any employer.

            The only thing employees are entitled to is a fair day’s wage for a fair day’s work.

            Good luck trying to get a fair day’s work out of most employees. The best ones I found were illegal alien Mexicans who worked long and hard right alongside of me.

            And I made it worth their while. That’s why they always kept coming back for more work to where I have a steady crew of regulars now whenever there’s work to be done.

            Government mandates and regulations already see to fair pay and safe work conditions, in current times.

  • avatar
    readallover

    If you want to read a terrific book about the first time this was tried pick up `Beijing Jeep` by Jim Mann.

  • avatar
    Volt 230

    Gen. McArthur must be turning in his grave, more like exploding, actually

  • avatar
    mars3941

    The A-holes at Fox will definitely put their twisted spin on this.

  • avatar
    billfrombuckhead

    China puts huge tariffs on imported cars making some Jeeps cost as much as $189,000 dollars! Hows that for a “chicken tax”?

    Jeep still sold 19,000 units.

  • avatar
    zenofchaos

    I’ll just leave this here…

    He who will not economize will have to agonize.
    -Confucius

  • avatar
    Lorenzo

    If they’re going to build Jeeps on the same line as the Viaggio, it looks like it won’t be the Jeep we all know, but the “world” 4×4 that Fiat/Sergio has in mind, based on maybe the Panda 4×4. They’ll just put the Jeep name on it. Funny, wouldn’t the Panda name sell in China, or is it already taken for that market?

    • 0 avatar
      highdesertcat

      It would probably be a Chinese version of a Jeep, whatever Jeep model they’ll be making there on the same line as the Viaggio.

      Visiting Chinese buy a Grand Cherokee upon arriving in the US for their vacation, use it while they sight-see the US, and then ship the vehicle back to China in a container vessel.

      As much as they may not be able to get away from the Chinese-imposed value-added tax or tariff, they’ll have transportation while they’re on vacay in the US, put lots of miles on their new Jeep seeing the US of A, and then send it home via container ship while they fly back.

  • avatar
    Lou_BC

    These Jeeps most likely will not show up in North America. Marchionne wants to start building Chrysler/Jeep products in Fiat’s European factories and ship those units to the USA. Fiat’s European factories are under-producing and since they have to deal with unions that make the UAW look Republican, they can’t lay off employees as easily as in the USA.

    • 0 avatar
      Lorenzo

      Those European factories are high cost, like their employees. The Great Recession has made American labor more competitive than any Euro factory or labor force, with lower energy costs as well. Don’t assume Sergio is trying to build up Fiat of Italy. I think he’s engineering Fiat’s escape from Italy through the Chrysler merger, with incorporation in the Netherlands so the Italian factories can be slowly shut down without raising a political firestorm. Ferrari and Maserati will have division HQ there to soften the blow.

  • avatar
    romismak

    Jeep should have been producing in China years, last year they were about 50k units sold purely imports with high tarrifs, jeep brand is iconic in China with many shops with jeep logos, merchandise and so on, if they would have been in China years, and lower prices they would sell maybe 300-400k units year somewhere around great wall, right now Chinese SUV market is booming, so Jeep should start production as soon as they can, every day they are loosing sales in China, because they sales could have been bigger i mean Jeeps in China are selling for 150-170k USD – and still they are biggest purely import brand, maybe Lexus is bigger with 60k units last year, but they need production there for sure

  • avatar
    LDMAN1

    Given the track record of Fiat Joint Ventures in China I am not holding my breath.

  • avatar
    Big Al from Oz

    Well, the US has forced foreign manufacturers to build in the US. Why not the US (Italians) build in foreign countries.

    The US will eventually buy Chinese cars, they have no choice in the future. The Chinese will eventually make it possible to import into China easier, just like the US will have to sooner or later drop its high tariffsa and barriers and let vehicles into the country.

    You can’t have two ways, America has a strong protectionist market, the Chinese has a strong protectionist market.

    Within a decade or less the Chinese vehicles will be of very good quality, just as good as the US or even better.

    China already has the largest sales of new vehicles in the world, this is just the beginning.

    Some companies will lose and some will win.

    A Jeep from China will be no worse than a Jeep from the US at the moment.

    You guys can call the Chinese names and be arrogant like the Europeans were at the end of the 19th century towards the US. Look at history and learn.

    You will have to tolerate and equal in economic influence, but it will take the Chinese years to learn how to manage political influence. The West is still learning.

    • 0 avatar
      doctor olds

      @BAFO- The Chinese actually have a protectionist market, on top of which no foreign maker can even do business there without a 50/50 joint venture with a Chinese company.

      The global makers can build high quality anywhere. The local Chinese carmakers may eventually be good enough and competitive enough, to be offered here, but not for a long time.

      I am curious as to why you presume, “The US will eventually buy Chinese cars, they have no choice in the future.” ?

      No choice? Why?

      • 0 avatar
        Big Al from Oz

        @DocOlds
        Wow, really,thanks for the education:) Read what I wrote and comprehend.

        Your comment on why America will buy Chinese cars;
        There are several reasons, how much money have the Chinese sunk into America to keep your market afloat. Did they pump ‘heaps’ of cash because they like you?

        Imagine 30 years ago if someone stated most everything you will buy in the future will come from China. What would have been the reaction. Laughter.

        The Chinese are where the US was 100 years ago or so. They are even emulating the US of yore. The US built the biggest, bridges, dams, buildings, etc starting just over 100 years ago.

        The US continued on and created fantastic infrastructure to support an ever growing economy.

        Why? Because the US was showing the world (Europeans mainly) they are stepping out.

        The Chinese are doing exactly the same right now.

        The world will have to make room for this change, as is occurring right now. The world did the same for the US’s rise to prominence as well. The difference this time is it will take China longer to develop than it took the US.

        Remember China is communist, not a very good model to base a society on. If China doesn’t change it will hit a ceiling and stay as a cheap factory of the world.

    • 0 avatar
      billfrombuckhead

      The difference between American and Chinese tariffs is like 10 to 1. I’ll believe all this globalization crap when we see Japan buying Korean and Chinese cars.

      • 0 avatar
        Big Al from Oz

        @billfrombuckhead
        How much content in Korean and Japanese manufactured products comes from China right now.

        Even the Ford Mustang runs a Getrag MT82 transmission from China.

        Slowly the Chinese are getting a handle on hydroforming floor pans, working aluminium for body panels, etc.

        Vehicle manufacturing can be set up in any country that is near a port, has electricity. Look at the infrastructure the US had when Henry Ford started to mass produce. Most countries in the world have regions with suitable infrastructure to support vehicle manufacturing.

  • avatar
    Lou_BC

    China only allows “partnerships” with Chinese companies. It is a Faustian Bargain. China has p!ss poor copyright and trademark laws/enforcement. Partnership means the sharing of intellectual property. Down the road, China could expel or close shop to foreign companies and market products on what they learned/stole.
    When it comes to the USA market, most of the stuff in Walmart is Chinese and people buy it in droves because they want to maintain their standard of living. China could do the same with the auto industry. Buy Chinese or face a drop in standard of living by purchasing domestic. People are inherently selfish, which will they choose?


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