Fiat Chrysler Automobiles NV (NYSE:FCAU) Targeting Double-Digit Growth on Jeep Sales in China

Fiat Chrysler Automobiles NV (NYSE:FCAU)

Fiat Chrysler Automobiles NV (NYSE:FCAU) has once again reiterated its intention of taking over the Chinese auto industry for SUV sales. Under the new push, the automaker is targeting double-digit growth as it seeks to bolster its prospects on Jeep sales.

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Focus On China

Jeep sales were up by 22% last year to 1.24 million units, a momentum expected to continue given the low oil prices. The Chinese auto industry should account for a huge chunk of sales this year given the high sales volume the country has guaranteed over the years. Given the strong demand for sport utility cars, the automaker aims to double its sales by 2018.

Fiat Chrysler Automobiles NV(NYSE:FCAU) has already started producing its Jeep Renegade in China as it looks to take advantage of the world’s largest automotive market. Given that the company arrived much later in China than most companies, it has a lot of catching to do as it targets double-digit growth.

Jeep Renegade becomes Fiat Chrysler second locally produced car following the launch of Jeep Cherokee last year. The smaller model will be built through a joint venture involving Guangzhou Automotive group. The plant has the capacity of producing up to 160,000 vehicles a year.

Increased Local Production

Last year, the car company confirmed plans to start producing its Jeep automobiles in India as part of $280 million investment. Brazil and Italy are the other two countries currently producing the Jeep Renegade.

Building cars in China marks is part of a bigger plan that seeks to boost sales locally. Local production should shield Fiat Chrysler Automobiles NV (NYSE:FCAU) from import taxes thus make it more price competitive.

Chief operating officer for the Asia-Pacific region, Mike Manley, expects pricing pressure to pose the biggest threat to Fiat Chrysler Automobiles NV (NYSE:FCAU) Chinese operations. Manley expects pricing pressure to persist throughout the year mostly affecting the prices of passenger vehicles.

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