(Reuters) - Fiat Chrysler Automobiles FIA.MI will announce an agreement by the end of April to allow production of Jeep models in China, the head of the Jeep brand, Mike Manley, said on Wednesday.
Manley said he hoped the deal with Chinese officials could be announced at this weekend’s Beijing auto show.
“It will be ideal if I can get the timing right for the Beijing show, but I‘m not at the stage to say that definitely,” Manley said in a telephone interview from the New York Auto Show. He said if not in time for Beijing, the announcement would “come before the end of the month.”
Fiat Chrysler would produce the Jeep models at a plant it operates with its Chinese joint-venture partner, Guangzhou Automobile Group Co (601238.SS). The plant is in Changsha, capital of the Hunan province, where Fiat produces the Viaggio.
Fiat Chrysler has not officially said which Jeep product would be the first to be made at Changsha, but it has strongly hinted it would be the Cherokee, which was introduced in the United States about a year ago.
The Cherokee is built on the same platform as the Fiat Viaggio, which makes it a natural to be made at Changsha, said Morningstar analyst Richard Hilgert.
Production at Changsha of a Jeep model is expected by mid-2015 “coming into the third quarter” Manley said.
Hilgert said after the Cherokee, the Jeep model most likely to be produced at Changsha is the Renegade, a subcompact SUV that was introduced at the Geneva motor show in March and made its U.S. debut at the New York Auto Show on Wednesday.
Manley said the subcompact SUV segment has a bright future with total annual global sales in 2015 of 2 million and total annual global sales of 3 million by 2020.
He said Europe is expected to have the most subcompact SUV sales, and sales in North America would be higher than analysts have forecast.
IHS Global Insight said about 271,000 subcompact SUVs would be sold in 2015 in North America. These vehicles include the Nissan Motor Co (7201.T) Juke, Kia Motors Corp’s (000270.KS) Soul, and another vehicle shown in New York, General Motors Co’s (GM.N) Chevrolet Trax.
The Renegade will be the first Jeep made exclusively outside the United States, and will first be produced in Melfi, Italy.
Manley said he was confident Jeep would meet a target set by Fiat Chrysler Chief Executive Sergio Marchionne of 1 million worldwide sales in 2014.
He pointed to Jeep’s first-quarter U.S. sales of 146,000, up
44.5 percent in the first quarter compared with a year ago. A million in sales would be a 37 percent increase from last year’s total sales of 731,565.
Hilgert said he thinks Jeep will not meet that “stretch goal” set by Marchionne, and will sell between 850,000 and 950,000 vehicles this year.
Reporting by Bernie Woodall