Beijing Jeep and FCA (Jeep, Chrysler, and Fiat) in China

Jeep was a pioneer in Chinese car production with the Beijing Jeep joint venture, but during the DaimlerChrysler years, Mercedes took over the plant and Chrysler was left with no serious presence in one of the world’s largest automotive markets.

The Beijing Jeep years

1988 jeep cherokeeIn 1979, American Motors started to talk with the Chinese government about building in the country. Jeep was traditionally one of the United States’ most international brands, building or licensing their designs in many parts of the world — which is the one of the main reasons Kaiser gave up its car business to acquire Jeep.

The Chinese government agreed to the deal, and Beijing Jeep was created to produce the Jeep Cherokee XJ, starting in 1985. The company later built variants of the BJ212, which spawned numerous variants over time; the half-ton, reportedly Russian-designed SUV, launched in 1969, is allegedly based on (and looks much like) the Jeep Wrangler, and was used by the Chinese army as well as retail buyers. It is now sold under numerous brand names.

After Chrysler bought AMC in 1987, Beijing Jeep added the Jeep Grand Cherokee, the Mitsubishi Pajero Sport and Outlander, and some locally developed vehicles. The historic joint venture was taken from Chrysler in 2006, with the outfit altered to sell just Mercedes cars by 2008, and renamed to Beijing Benz.

Fiat Chrysler returns to China

jeep wrangler dragon

On November 20, 2014, Fiat Chrysler Automobiles (FCA) and Guangzhou Automobile Industry Group (GAC) announced a preliminary agreement to expand their current joint venture, including a second plant in Guangzhou.

FCA and GAC agreed to bring a Chrysler product to China, adding it to existing Fiat cars. GAC Fiat will have access to the Fiat and Chrysler cars and trucks announced during the FCA May 2014 Investor Day, and reaffirmed its commitment to local production of three new Jeeps by the end of 2016. By 2018, Jeep will have one of the most complete SUV portfolios in China, ranging from subcompact SUVs to full-size luxury SUVs (possibly including imports).

china plants
This chart was presented before the November 20, 2014 plan.

A joint operation will be responsible for all sales, marketing, product planning and after-sales support of Jeep, Fiat, and Chrysler vehicles, both locally made and imported.

The industrial operations in Changsha support and be responsible for the Changsha and Guangzhou vehicle and powertrain plants.

FCA china five year plan
Note: the chart above was created before the new agreement.

GAC and FCA are trying to double the number of dealers by 2018. The best-performing dealers from the two existing networks in China will be used for both the Jeep and Fiat/Chrysler network.

John Kett, General Manager of Fiat Chrysler APAC [Asia-Pacific] and head of Jeep APAC, said that the plan would allow for an expansion of sales in China to 760,000 by 2018, as per the current investor plan.

The rationale

The Chinese market may be the largest in the world, but the Chinese government imposes massive import tariffs to support the country’s manufacturing; because of that, the entire Jeep brand carries luxury level pricing.

The least expensive Jeep sold in China is the Compass, which starts at 221,900 Yuan — roughly US$35,600 at the current exchange rate. That same Jeep Compass in the US costs just $18,995; cutting the Chinese price by 25% would save buyers $8,900.

If you step up to the larger Jeep Cherokee, the Chinese list price starts at 375,900 Yuan, or US$60,298 — but it costs only $22,995 in the US. With the top of the line Cherokee V6, the price jumps up to US$85,002.

Jeep has a special edition of the tried and true Wrangler for the Chinese market. Buying the base 2015 Wrangler in China with the 2.8 diesel will set Chinese buyers back about $69,000 (429,900 Yuan), while the Wrangler Rubicon with the 3.6L Pentastar V6 and four wheel drive will run at least $86,600 before any options.

FCA, like all foreign automakers, is required to work with a Chinese partner to build cars locally. It is unlikely that they will be exported outside of China, given the size of the market and the capacity of the joint venture.

The shift of Chinese-sold Jeeps to a Chinese manufacturing facility will remove a small amount of demand from the North American plants, but with the swift increase in Jeep sales across the entire model line, plants all over the home continent should have no problem keeping the workers busy.

The Renegade: 2016+

The Chinese Jeep Renegade went into production in April 2016; first quarter Jeep sales in China were already at 33,500 without it, well above 2015 but still “a drop in the bucket.”

jeep renegades in China

As of June 2, 2016, the price started at  ¥141,800, or US$21,540; the most expensive model sold started at  ¥178,800 (US$27,160). Early buyers got a seven speed Fiat dual-clutch automatic with the Fiat T-Jet 1.4 liter gasoline engine; the 106 hp version was standard, with a 148 hp optional. The Chrysler 2.0 engine (153 hp) was coming later, with the nine-speed automatic.

The Renegade (“Freedom Man”) is being positioned as a fun car, with eleven paint colors, but the tag line, according to Jeep’s Chinese web site, is “Professional Level.” Shown in both Mandarin and English, the phrase was used with each attribute, such as Professional Level Security and Professional Level Exploration.

world of warcraft renegades

A “Warcraft Limited” version, based on World of Warcraft, was sold in blue and red versions — red for tribal edition, blue for union version. The tribal car proclaims, in English “Fight for the Horde” on the hood. Only 666 of these were made.  (Thanks, Hank600ES)

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