Jeep to Begin SUV Production in China in 2014

Jeep plans to build a SUV in China, to become more competitive in the fast-growing segment.

The fact that Jeep will manufacture a SUV in China dies not mean it will reduce or transfer production from the US. On the contrary the automaker is increasing production by 4,000 units in Detroit, Toledo or Belvidere, Ill., this year.

“For us to continue the growth of the Jeep brand and therefore be successful because of that, you need to produce locally for the local market,” Manley said in a group interview at the Shanghai Auto Show.

In January Chrysler and Guangzhou Auto Group signed a deal to create a joint venture and although they still need the government’s approval Jeep CEO Mike Manley is confident that production will begin by the end of 2014. Although Jeep was the first US automaker to sell vehicles in China, the company’s image was stained during the last presidential campaign when Republican candidate Mitt Romney spread rumors that Jeep plans to transfer SUV production from the US to China.

Last year Jeep exported in China 46,000 vehicles, making the country its second-biggest market. Yale Zhang, managing director of Automotive Foresight Shanghai, predicts that the SUV segment will increase in China from the current 15% (2 million units)market share to 20% in 2015 (3.5 million units).