Chrysler, the third largest American automaker, had an outstanding 2011. Sergio Marchionne, the company’s CEO, knows it isn’t enough to ensure survival. During the Detroit Auto Show he said that the Fiat-Chrysler Group might need another partner in order to create the economies of scale needed for survival in the industry.Chrysler also lacks presence in the biggest car market in the world, namely the Chinese market. Those two issues might be solved if negotiations between Chrysler and Guangzhou Automobile Group come to fruition.
According to Detroitnews.com the two companies are discussing the establishment of a plant to produce Jeep vehicles.Fiat, who owns 58.5% of Chrysler, shares a tie-up with Guangzhou Automobile Group since 2009, jointly developing a compact car. Last year Jeep almost doubled its sales in China to over 22,000 vehicles, all of which were imported.
A local manufacturing facility will enable Chrysler to tap into the Chinese market with its most famous brand, and do so much more profitably.
Marchionne is insisting on Chrysler retaining its control over Jeep brand in China, an idea the Chinese are very reluctant to adopting.
“We’re very protective of that brand,” Marchionne said. “I want Chrysler to be able to own that thing in some fashion. I don’t want it diluted in terms of ownership or control, so we’re still studying ways to get there.”
NOW WATCH: Executive Life videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.