Fiat sees at least 100,000 Jeeps made in China in 2014

MILAN Thu Jan 17, 2013 1:51pm GMT

A company logo is seen on a Fiat car displayed on media day at the Paris Mondial de l'Automobile, September 28, 2012. REUTERS/Christian Hartmann

A company logo is seen on a Fiat car displayed on media day at the Paris Mondial de l'Automobile, September 28, 2012.

Credit: Reuters/Christian Hartmann

Related Topics

Quotes

   

MILAN (Reuters) - Fiat (FIA.MI) and its U.S. unit Chrysler expect to roll out at least 100,000 Jeeps in China when production starts in 2014 as they seek to catch up with rivals in the world's biggest car market.

Output could double, the Italian carmaker's Chief Executive Sergio Marchionne, without giving a precise timeframe.

Chrysler, in which Fiat has a 58.5 percent stake, said on Tuesday it had agreed to make Jeeps in China with Guangzhou Automobile Group (601238.SS).

Fiat is trying to offset a slump in European sales by targeting fast growing markets in Asia and Latin America. The Italian firm and Chrysler lag far behind other foreign carmakers in China, where consumers bought 19.3 million cars last year.

"We expect production of around 100,000 Jeeps per year which is expandable to 200,000," Marchionne, who is also CEO of Chrysler, said on the sidelines of a conference, adding production could start in 18 months.

General Motors (GM.N) and Volkswagen (VOWG_p.DE) both sold more than 2.8 million cars in China last year, and together accounted for over 29 percent of total vehicle sales in China, according to IHS Global Insight.

Jeep, Chrysler and Fiat, by contrast, sold just over 60,000 cars in China in 2012.

Since Fiat helped rescue Chrysler from bankruptcy in 2009, the U.S. No.3 automaker has turned into the main profit driver for the combined group thanks to strong U.S. demand.

Marchionne said he expected a court decision on the pricing of an option it has exercised to buy a 3.3 percent stake held by a union healthcare trust in the U.S. carmaker in the first quarter.

Under Chrysler's bailout agreement Fiat is able to exercise call options to purchase portions of the 41.5 percent stake held by the VEBA healthcare trust.

However, the two have been locked in a courtroom battle after VEBA balked at the $139.7 million price tag Fiat offered to buy a 3.3 percent tranche of Chrysler shares last July, saying it was too low.

In January Fiat filed to buy another 3.3 percent tranche of Chrysler from the VEBA.

Asked about the outlook for the global car market this year, Marchionne said he did not expect any meaningful recovery in Europe, where demand for new cars fell to a 17-year low in 2012.

"In North America, in Latin America and in China sales will rise," he added.

At 1307 GMT Fiat shares were up 4 percent at 4.4 euros. The shares had risen before Marchionne's comments.

(Writing by Silvia Aloisi; editing by James Jukwey)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (7)
ra44_mr2 wrote:
Hey wasnt this a big deal last year that Romney told Ohio they were going to outsource overseas Jeep production and the Obama campaign made a big deal how it wasnt true. Funny….i guess Romney was smarter than anyone gave him credit for.

Jan 18, 2013 8:43pm GMT  --  Report as abuse
TruthSeeker59 wrote:
So, let’s look back before the US Presidential election, where Romney told potential voters in Ohio “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.”

Romney was called a liar for saying this. Obama took Ohio, and now we have higher taxes and more layoffs than before.

The combination of fawning media and a public too lazy to look beyond the MSM, is reducing the American economy further and further.

Jan 18, 2013 8:52pm GMT  --  Report as abuse
StageDriver wrote:
Mitt Romney told the lie of the year – he said Jeeps were going to be built in China. This must be a lie too – Barry and Joe both said it wasn’t going to happen and the 52% ill informed believed them.

:/

I’m glad I’m 70 and won’t be around too much longer to watch this politically induced decay of the country I served.

Jan 18, 2013 10:57pm GMT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.