Thursday, October 25, 2012

Jeep Production May Return to China

As reported by Autoblog and Bloomberg, Jeep's parent company FIAT is working to reinstate production of the Jeep vehicle lineup in China.  Asian demand for Jeeps has steadily risen and American demand for the Grand Cherokee and Wrangler has had their factories working at maximum capacity, so a solution has to be found to allow Jeep to match supply with demand.

Fiat is in “very detailed conversations” with its Chinese partner, Guangzhou Automobile Group Co., about making Jeeps in the world’s largest auto market, said Mike Manley, chief operating officer of Fiat and Chrysler in Asia and President of the Jeep brand.  “The volume opportunity for us is very significant.  We’re reviewing the opportunities within existing capacity” as well as “should we be localizing the entire Jeep portfolio or some of the Jeep portfolio.

Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio.  Manley referred to creating additional Jeep production sites rather than displacing output from North America to China.

***UPDATE 10/30/2012***
Facebook and countless other news sources have blown up the last few days with inaccurate reports resulting from misunderstanding of this announcement.  Most people, it seems, have mistaken this expansion of Jeep's production into China as a relocation of manufacturing from America to China.

FIAT/Chrysler CEO Sergio Marchionne has just issued the following statement on the Chrysler Blog in which he clarifies the announcement:

Chrysler Group’s production plans for the Jeep® brand have become the focus of public debate.

I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China.

North American production is critical to achieving our goal of selling 800,000 Jeep vehicles by 2014. In fact, U.S. production of our Jeep models has nearly tripled (it is expected to be up 185%) since 2009 in order to keep up with global demand.

We also are investing to improve and expand our entire U.S. operations, including our Jeep facilities. The numbers tell the story:

• We will invest more than $1.7 billion to develop and produce the next generation Jeep SUV, the successor of the Jeep Liberty -- including $500 million directly to tool and expand our Toledo Assembly Complex and will be adding about 1,100 jobs on a second shift by 2013.
• At our Jefferson North Assembly Plant, where we build the Jeep Grand Cherokee, we have created 2,000 jobs since June 2009 and have invested more than $1.8 billion.
• In Belvidere, where we build two Jeep models, we have added two shifts since 2009 resulting in an additional 2,600 jobs.

With the increase in demand for our vehicles, especially Jeep branded vehicles, we have added more than 11,200 U.S. jobs since 2009. Plants producing Jeep branded vehicles alone have seen the number of people invested in the success of the Jeep brand grow to more than 9,300 hourly jobs from 4,700. This will increase by an additional 1,100 as the Liberty successor, which will be produced in Toledo, is introduced for global distribution in the second quarter of 2013.

Together, we are working to establish a global enterprise and previously announced our intent to return Jeep production to China, the world’s largest auto market, in order to satisfy local market demand, which would not otherwise be accessible. Chrysler Group is interested in expanding the customer base for our award-winning Jeep vehicles, which can only be done by establishing local production. This will ultimately help bolster the Jeep brand, and solidify the resilience of U.S. jobs.

Jeep is one of our truly global brands with uniquely American roots. This will never change. So much so that we committed that the iconic Wrangler nameplate, currently produced in our Toledo, Ohio plant, will never see full production outside the United States.

Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand.

It is inaccurate to suggest anything different.

Sergio Marchionne

***UPDATE 10/31/2012***
Ward's Auto World has posted an editorial in their Management Issues, Politics, and Current Events blog, entitled Chrysler Falls Victim to Internet Fear-Mongering.  Their summary: "What’s lost in translation was a quickly spread miscommunication that Chrysler would end Jeep production here in the States."


  1. taking the production function to China will definitely increase the production rates and significantly reduce the cost of production. hope to see better mechanical strengths.

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