GAC FCA JV sets up sales company to drive growth in slowing China market

GAC Fiat Chrysler Automobiles Co (GFC), the existing joint venture company of Fiat Chrysler Automobiles (FCA) and Guangzhou Automobile Group Co (GAC), are to set up a  new wholly owned sales company, GAC Fiat Chrysler Automobiles Sales Co.

Daphne Zheng is to serve as the sales company’s CEO while Chen Daohong will be the executive vice-president. The sales company will support GFC’s upcoming sales activities in China and to expand the Jeep brand portfolio offerings in China. GFC’s Guangzhou manufacturing base will be put into operation in the first half of 2016. By 2018, GFC expects to locally produce eight competitive vehicles in China.

Commenting on the new GAC Fiat Chrysler Automobiles Sales Co, GAC general manager Zeng Qinghong said: “The localised production of Jeep will enable us to provide high-quality products as well as satisfied experiences and services for the Chinese consumers. GAC adopts a three-pronged strategy − to produce vehicles of its own brands; vehicles of the joint ventures with European and U.S. automakers; and vehicles of the joint ventures with Japanese automakers. By 2020, the sales of GAC will reach 3 million units, and the partnership with FCA will be an important part of the strategy.”

“This move represents a major landmark in the successful progress of our brand, our business and our partnership here in China,” said Mike Manley, president and CEO – Jeep Brand, FCA - Global. “Jeep sales in China saw an increase of nearly 50 percent in 2014, and China has now grown into the number one Jeep market outside of the United States.

“Local production of Jeep vehicles will improve our competitive position in the market and will allow us to bring the legendary Jeep capability and spirit to more customers in what is now the largest automotive market in the world,” he added.

GAC and FCA expect to begin producing the Jeep Cherokee in China by the end of the year, with localised production of two additional Jeep SUVs expected by the end of 2016. In addition to local Jeep production, FCA and GAC also have agreed to localise a Chrysler brand product, expanding the current passenger car lineup for the Fiat and Chrysler brands in China.

Under the new structure, GFC will retain responsibility for the localised manufacture of Jeep, Chrysler and Fiat brand vehicles. GAC Fiat Chrysler Automobiles Sales Co will handle sales management, marketing, product planning and aftersales for all models in the Jeep, Chrysler and Fiat brand portfolios. 

Locally produced vehicles in China will follow the same World Class Manufacturing (WCM) protocols that FCA uses throughout its global manufacturing facilities, including those in North America and Europe. WCM is a methodology that focuses on reducing waste, increasing productivity and improving quality and safety in a systematic and organised way, with the goal of providing top-quality products to customers, including those in China.