Brand targets 1.5 million units with strong growth in South America, China

Marchionne aims to double Jeep's global sales by 2018

Brand targets 1.5 million units with strong growth in South America, China

The new Renegade entry-level Jeep will be a key model in brand's growth. Renegade output will start in June in Italy.
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TURIN — Fiat Chrysler CEO Sergio Marchionne wants the automaker's Jeep brand to double its global sales to more than 1.5 million vehicles by 2018 with strong growth in South America and China, sources said.

Marchionne sees the iconic U.S. brand as one of the main pillars of growth for Fiat Chrysler and will announce his ambitions for Jeep when he unveils a new five-year product and business plan for the combined Italian-American company on Tuesday, sources told Automotive News Europe.

Jeep is the only brand that will overdeliver on the volume targets for Fiat Chrysler units that Marchionne set in November 2009. At the time, Jeep sales were targeted at more than 800,000 this year, up from 497,000 in 2008. Last year, Jeep’s sales worldwide grew by 36 percent to 731,565 units and the brand is on track to reach more than 1 million global sales this year.

The new Renegade entry-level Jeep will be a key model in brand's growth. Renegade production will start in June in Melfi, Italy. The factory has capacity to produce 150,000 Renegades a year. The Melfi also will be used to build the Fiat 500X, which shares a platform with the Renegade.

Initially, Melfi will build Jeep's smallest vehicle for global markets, then later this year, Fiat Chrysler will begin pilot production of the Renegade for South America at a new plant in Pernambuco, Brazil.

"Pernambuco will be Fiat Chrysler’s most advanced plant in the world and the Renegade the first product built there," Fiat Chrysler's Latin America CEO Cledorvino Belini told Brazilian media on April 4.

China production

Fiat Chrysler plans to begin making Jeeps in Guangzhou, China, by late 2015 after reaching an agreement with local partner Guangzhou Automobile Group. The company said in April that three Jeep models will be built with Guangzhou Auto without naming the vehicles. According to sources in Italy, the Renegade will be the first Jeep built in Guangzhou.

In 2016, Guangzhou will add production for China of a second Jeep model. Code-named project 551 at Fiat, this compact SUV will replace the Compass and Patriot sister models globally, sources said. At the moment is unclear where the Compass and Patriot replacement will be built for North America and Europe, but most likely it will not be exported from China.

Jeeps may also be produced at Fiat Chrysler's underused joint venture factory with Guangzhou Auto in Changhsa. Fiat and Guangzhou Auto have been negotiating for over two years to add Cherokee production at the factory, which currently builds the Fiat Viaggio and Ottimo compacts, Fiat’s variants of the Dodge Dart.

The Cherokee is the obvious choice for local production in Changsha, Jeep brand boss Mike Manley said in an interview at the Geneva auto show earlier this year. "We expect to finalize the deal by the summer and get the government approval to start local production by the end of 2014," Manley said.

Manley does not see China becoming Jeep’s No. 1 market anytime soon. "For China it would be difficult to pass the U.S." in terms of Jeep sales, he said.

Last year, Jeep sold nearly 60,000 vehicles in China, ahead of Canada’s 44,700 units but well behind the brand's 490,500 U.S. sales, according to company data. Jeep sold 24,056 vehicles in Europe last year, down from 28,068 in 2012, according to JATO Dynamics.

Marchionne said in March that Fiat Chrysler might eventually boost annual deliveries by as much as 55 percent to 7 million vehicles, helped by Jeep's growth.

Jennifer Clark and Bloomberg contributed to this report

You can reach Luca Ciferri at lciferri@crain.com.

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