Fiat Chrysler Automobiles and Guangzhou Automobile Group Co. will establish a joint venture to integrate sales and marketing for the Fiat, Chrysler and Jeep brands in China.
The move is intended to enhance cooperation between the two companies and pave the way for local Jeep production in China, according to GAC.
Currently, Fiat Chrysler has separate sales and marketing operations in China for the Fiat brand and Chrysler-Jeep.
GAC Fiat Automobile Co. builds two Fiat models - the Viaggio compact sedan and the Ottima compact hatchback -- in the central China city of Changsha.
GAC Fiat, 50-50 production joint venture between GAC and Fiat Chrysler, is building a second assembly plant in the south China city of Guangzhou. It's due to start production in 2016.
Three Jeep models, including one specifically developed for China, will be built in the new plant by the end of 2016.
Fiat Chrysler aims to sell 850,000 vehicles annually in China in 2018, up from 130,000 units in 2013, according to Mike Manley, the company's Asia chief.
Manley made the sales projections in May during a presentation of the company's five-year plan at Chrysler Group's headquarters in suburban Detroit.