Two from Bloomberg. The first article is the source of information for the OP’s Blogger’s article. Funny, the data from the Blooberg article was completely twisted out of character to fit the blogger’s assertions.
http://www.businessweek.com/news/2012-10-21/fiat-says-china-may-build-all-jeep-models-as-suv-demand-climbs
Bloomberg News
Fiat Says Jeep Output May Return to China as Demand Rises
By Craig Trudell on October 22, 2012
Fiat SpA (F), majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers’ operations in the region.
Fiat is in “very detailed conversations” with its Chinese partner, Guangzhou Automobile Group Co. (2238), about making Jeeps in the world’s largest auto market, said Mike Manley, chief operating officer of Fiat and Chrysler in Asia. Chrysler hasn’t built Jeeps there since before Fiat took control in 2009.
“The volume opportunity for us is very significant,” Manley, who is also president of the Jeep brand, said in an interview at Chrysler’s Auburn Hills, Michigan, headquarters. “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, which entered an alliance with Turin, Italy-based Fiat as part of its U.S. government-backed bankruptcy, is relying on growth in China to counter weakness in Europe’s auto market. The automaker is targeting 500,000 annual sales outside North America by 2014, more than triple its overseas deliveries in 2009.
Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley referred to adding Jeep production sites rather than shifting output from North America to China.
Asia’s Strength
International sales for Chrysler climbed 22 percent to 153,154 this year through September, according to the company. The Jeep brand accounted for more than three of every four of those deliveries, with sales surging 54 percent to 117,189.
“We’ve grown much stronger in Asia to make up or compensate for some of the difficulties in Europe,” Manley said. Europe will be in “very difficult, tough times” through at least 2013, he said.
Boosted by strong demand for the Grand Cherokee and Compass sport-utility vehicles, Jeep sales in China have more than doubled to 33,463 this year through September. The brand topped total deliveries for all of 2011 by July of this year.
Chrysler’s 2014 international sales target is “certainly within reach,” Manley said. The European auto market is on track to plunge in 2012 by the most in 19 years, according to the European Automobile Manufacturers’ Association.
“Given what we see around the world, it is stretching for sure, but it’s not something we’ve given up on,” he said.
Fiat and Guangzhou’s plant in Changsha in central China has initial annual capacity of 140,000 cars and is capable of eventually assembling 500,000 vehicles per year. The automakers will add production of a new vehicle to the factory roughly every 12 months and began building the Fiat Viaggio compact there in June.
To contact the reporters on this story: Craig Trudell in Southfield, Michigan, at ctrudell1@bloomberg.net.
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net
Jeeps Sell for $189,750 as China Demand Offsets Tariffs
By Tim Higgins - May 21, 2012 5:00 PM PT
http://www.bloomberg.com/news/2012-05-22/jeeps-sell-for-189-750-as-china-demand-offsets-tariffs.html
The Jeep store in south Beijing near the Timberland and London Fog outlets carries the season’s latest offerings of branded shirts, shoes, belts and backpacks. Not for sale here: Jeep sport-utility vehicles.
Jeep gear is so popular in China that there are more than 1,500 licensed clothing outlets in the country, where only 120 auto dealers sell the brand. While Jeep has a strong image connected to an adventurous lifestyle, three decades of changing ownership have left it without local production and missing out on surging demand for SUVs in the world’s largest vehicle market.
Enlarge image Jeeps Sell for $189,750 as China Demand Offsets Import Tax
A Chrysler Group LLC Jeep sport utility vehicle (SUV) sits parked under red lanterns in Beijing, China. Photographer: Keith Bedford/Bloomberg
2012 Jeep Grand Cherokee SRT8 in Promotional Video
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April 12 (Bloomberg) – The 2012 Jeep Grand Cherokee SRT8 4x4 sport-utility vehicle is seen in a promotional video from Chrysler Group LLC. The vehicle features a 6.4-liter Hemi V-8 engine with 470 horsepower and 465 pound-feet of torque. (Video courtesy of Chrysler Group. Source: Bloomberg)
Enlarge image Jeeps Sell for $189,750 as China Demand Offsets Import Tax
The Jeep Wrangler vehicle is seen during the 2012 Beijing International Automotive Exhibition at China International Exhibition Center in Beijing, China, on April 25, 2012. Photographer: Feng Li/Getty Images
“Our brand awareness and consideration is running way ahead of where our actual volumes are,” Mike Manley, head of the Jeep brand, said in an interview in Beijing last month. “That’s why I can’t say strongly or often enough just what an opportunity China offers for us.”
Jeep sales rose 63 percent last year to 19,013 – less than three days worth of China sales for General Motors Co. (GM), the top foreign automaker in the market. Detroit-based GM has 2,900 dealers – more than 24 times the Jeep number – that sold 2.55 million vehicles last year, mostly Buick, Chevrolet and Wuling models.
Manley, who oversees Asian business for Jeep owner Chrysler Group LLC, said he wants to increase the brand’s sales in China by expanding Chrysler’s dealer network by as much as 29 percent this year and restarting local production by early 2014.
While Ford Motor Co. (F), a late entry to China, is working just to build awareness of its brand and products, Jeep struggles to meet runaway demand.
Well-Known Brand
“It’s not that the brand isn’t known; it’s known,” said Bill Russo, a former China chief for Chrysler. “It’s not that people don’t have a positive impression; they do. It’s just that they can’t get it. They can’t get what’s available around the world here in China, not at anywhere near the price point that you get anywhere else in the world.”
The Jeep brand’s first steps into China as a consumer brand seemed promising in the early 1980s, when military versions of the off-road vehicle were widely recognized.
“It’s amusing to think that when Jeeps were first produced in China, there were few cars on the streets, only three ring roads in Beijing and no freeways from city to city,” Jim Mann, an author-in-residence at Johns Hopkins School of Advanced International Studies in Washington D.C., said in an e-mail. “The enterprise has had a series of problems, but survives, like a cat with nine lives.”
Wrote the Book
Mann wrote a 1989 book called “Beijing Jeep” that detailed the challenges then-owner American Motors Corp. faced in setting up the first U.S. auto-manufacturing partnership in China in the early 1980s. Those challenges were immense, from cultural misunderstandings with then-partner Beijing Automotive Works to the changing ownership of American Motors when purchased by Chrysler Corp. in 1987.
Chrysler itself merged with Daimler-Benz AG in 1998 before the U.S. unit, based in Auburn Hills, Michigan, was sold to Cerberus Capital Management LP in 2006.
By the time Turin, Italy-based Fiat SpA (F) took control of Chrysler and its Jeep brand in 2009 as part of the U.S. automaker’s government-backed bankruptcy reorganization, Jeep’s original manufacturing partner had become Mercedes’s partner. Jeep output in China stopped in 2006.
Lacked Investment
“Chrysler had so many challenges in dealing with the change of ownership that they really couldn’t put the investment and the attention into building up any joint venture in China,” said Russo, the former Chrysler executive, who now is president of auto consultancy Synergistics Inc. “They really scaled back to focus on the crisis back home. Now that the boat is afloat, so to speak, everywhere else, you’ve got to sail it back to China.”
Without an assembly partner, Chrysler has been looking for one in China as required to avoid steep tariffs. Manley also runs Asian operations for Fiat, Chrysler Group’s majority owner. Fiat’s partner, Guangzhou Automobile Group, would be a natural and officials with that company have said they want to build Jeeps.
“Of the options that are out there, which is the easiest to get to? Probably with Fiat’s joint-venture partner, mainly because there’s already a good relationship,” Manley said. Still, he said, there are a number of options for Chrysler in China. “I certainly have got the teams involved in it focused on coming up with the right solution for us by the end of the first half and I like to think we can do that,” Manley said.
It will probably take at least 18 months to begin production after deciding on a partner and receiving government approvals, he said.
Higher Prices
In the meantime, he watches as imported Jeeps continue to see sales growth even though the duties push up prices. The Jeep Grand Cherokee starts at 575,900 yuan, or $91,064. In the U.S., it starts at $26,995, according to company websites. The 2012 Grand Cherokee SRT8 version costs at least 1.2 million yuan, or $189,750, compared with $54,470 in the U.S., according to Edmunds.com.
“Jeep is an asset to Chrysler that could really have a lot of upside,” Russo said. “But they now need to localize these cars. Every competitor is localizing SUVs.”
Deliveries of SUVs will probably increase 16 percent this year to 1.85 million units, the fastest-growing segment of China’s automobile industry, according to the latest forecasts from the state-backed China Association of Automobile Manufacturers. The category grew 20 percent last year, according to CAAM.
Chrysler’s limited product range also makes it harder for the company to expand its dealer network, said Russo, who is based in Beijing.
“This is why Ford is now investing pretty heavily to introduce, I think, 15 models between now and 2015,” he said. “To get your dealers to invest, they have to see an exciting range of products that they can sell in reasonable volume.”
‘Safe, Rugged Car’
In the stand-alone Jeep clothing store, the walls are decorated with black-and-white photos of military jeeps as well as modern-day Wranglers. The brand’s ruggedness image led Ding Qi, a Shanghai businessman, to buy his wife a Jeep Grand Cherokee in 2004.
“I wanted to buy her a safe, rugged car, not one of those dainty subcompacts,” he said in an interview.
They use the SUV to go on drives with a local Jeep club. This year, the club, which has 200 members, plans to take a 48- day cross-country trek from Shanghai to Tibet to Nepal and back.
“A Jeep driver is one who doesn’t give up when faced with adversity,” Ding said. “That’s the impression I get because we’ve had to deal with floods, landslides closing off roads and other obstacles, but the club members always pull together.”
‘Sense of Superiority’
Yang Yang, 35, replaced her 2004 Grand Cherokee with a Volkswagen Tiguan this year because, she said, she thought the newer Jeeps had become less rugged.
“You don’t really feel it driving in the city, but when you get into the mountains or on a riverbed, you have this sense of superiority and joy,” she said of her old Jeep. “It’s hard to describe to people who don’t drive a Jeep and I’ve not had the same feeling from other SUVs – not the Tiguan that I’m driving now.”
The vehicle’s capabilities are so spectacular that sometimes they draw a crowd, she recalled.
“I love the Jeep for its ruggedness,” she said. “I remember one time we were going deep into the mountains in Anhui province and the villagers from surrounding villages came out to watch us.”
To contact the reporters on this story: Tim Higgins in Southfield, Michigan, at thiggins21@bloomberg.net.
