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Jeep production staying in US

by David Zatz on

Jeep production is staying in the United States, but Chrysler is considering building a full line of Jeeps in China as well, for the local market. Chinese trade policy imposes extremely high taxes on imported cars, making the sale of US-made Jeeps in China extremely difficult.

In the 1980s and 1990s, a joint venture, Beijing-Jeep Corporation, was successful with their line of Chinese-built Jeeps. Beijing Jeep was created by American Motors, and originally built Jeep Cherokees from “knockdown kits” (CKD), until local parts  (alternators, ball joints, seats, etc) and stampings (control arms, body, and other structural pieces) could be produced.

Chrysler Motors bought AMC in 1987, inheriting the company’s minority control over Beijing Jeep. When Daimler took over Chrysler, they gained this control, and later switched from building Jeeps to making Mercedes for the local market. When DaimlerChrysler sold Chrysler to Cerberus, they retained their interesting in the Beijing joint venture.

Presidential candidate Mitt Romney, last night, took a report from political blogs and repeated it to a crowd of people, claiming that Chrysler planned to shift production from the US to China. The original Bloomberg story merely stated that Jeep “may eventually make all of its models” in China — but also carefully noted that production would not be moved from the United States. The blogs did not report on that aspect of the original article.

Romney’s father famously ran American Motors, which purchased Jeep from Kaiser and was later purchased, with Jeep, by Chrysler. His campaign did not respond to followup queries, but a Chrysler spokesman stated that Jeep had no intention of transferring any production to China.

Cerberus leaders had reportedly tried to sell Chrysler to Chinese automakers, without success, during the brief period when Cerberus owned the company.

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