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.