The famous 4x4 car maker Jeep has long been specific to the American market and many thought it unlikely that its cars would be manufactured anywhere else.
However, things are now changing with Jeeps set to be assembled on four continents, turning the company into a global one. Factories in India, China, Italy, and Brazil are all set to begin work in 2015, giving the Fiat Chrysler Automobiles a vastly larger manufacturing capacity.
A large production increase = more sales
Within just 18 months, it is believed that Jeep’s manufacturing capacity will increase by as many as 590,000 units. This is good news for the brand, which has high hopes of reaching annual sales of 1.9 million in the not too distant future. Whilst it is likely to take a few years to reach these numbers, Jeep hopes that by branching out into other countries, they are setting the right foundation to build sales in the future.
The CEO of Jeep, Mike Manley, was quoted as saying “All global brands have a global footprint” and this is something that Jeep wants to be a part of. In 2009, Jeep was designated as the leading global brand for FCA and since then sales of its cars have almost tripled. In 2014, 1.02 million units were sold with over 30% of them coming from outside the United States.
Catching up with the competition
Although the number of Jeeps sold outside the United States has increased dramatically since 2009, it is widely believed that when they change to global production, these figures will continue to increase. Car brands like Toyota, Ford, and Chevrolet have had a global presence for years and this has given them greater access to the global markets. As Jeeps have been manufactured purely in the United States until now, they have had minimum access to other markets, even though they should have performed well.
Bringing prices down in Brazil
By manufacturing vehicles in Brazil, the company hopes to lower the purchase cost for those in the country itself. As of May 2015, a luxury SUV model Grand Cherokee costs almost double the price in Brazil as it does in the United States. This large price difference has been made clear in the relatively small sales that have been achieved in Brazil. It is hoped that the brand’s manufacturing plant in Brazil will be able to manufacture as many as 250,000 Jeeps each year. These vehicles will not be subject to import duties, making them much more accessible to the local population.
Making new connections in India and China
Although Jeep originally did manufacture in China, these deals fell through in 2006 and so they are entering into the Chinese market for a second time. There are plans to start manufacturing Cherokees in the country by the end of 2015 with plans to build up to three models for the Chinese population in the near future. In India, Jeeps will be manufactured in Pune in a joint deal between Tata Motors and Fiat. Grand Cherokees and Wranglers are the first two autos set for production with others potentially in the pipeline.