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Chrysler CEO Marchionne: Jeep Factories In China Are Just The "First Step In The Globalization Of Jeep"
Howard Richman, 1/14/2013

An article in today's Detroit News (Chrysler to build Jeeps in China) has to be translated in order to be understood. It begins:

Chrysler CEO Sergio Marchionne said the automaker plans to build some Jeeps in China for the local market — and later, in Russia.

"As part of our global expansion of the Jeep brand, there are some cars — that because of the price position in the market — can never be made in the U.S. and exported," Marchionne told reporters on the sidelines of the North American International Auto Show....

TRANSLATION: Due to China's 25% base tariff on American produced automobiles, plus the additional 15% added in December 2011, Fiat can't afford to export Jeeps to China. Since Russia is copying China's strategy, Fiat will also build Jeeps there.

"We're going to be announcing the first step in the globalization of Jeep (in China). There's another one that's going to come in Russia. These things are part of a natural process of expansion."

TRANSLATION: Fiat is engaged in the "globalization of Jeep." During the first stages its overseas production will be for local markets.

Marchionne said he will keep "the pillar cars of the Jeep (brand) in the United States. Wrangler is one. The Grand Cherokee is another. These are things that need to be protected because they represent the best and the essence of Jeep.

TRANSLATION: Fiat realizes that its Chinese partner will steal its Jeep technologies when it produces Jeeps in China. That's why it won't be producing its top-of-the-line Wranglers and Grand Cherokees there.

SUMMARY: China keeps out American products; America lets in China's products. China gets 7-10% growth; America gets 1-2% growth. Fiat is doing the best it can, given this playing field.

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