A modified Jeep Wrangler Photo: CFP

Just like many other foreign automakers, the well-known US sports utility vehicle (SUV) brand, Jeep, has long disclosed its intention of bringing production to China. But where exactly it will set up shop in the world's largest auto market going forward is proving a bit unclear.

In June 2012, when GAC Fiat Automobiles Co, the joint-venture between Fiat and its China partner GAC group, in which each party owns a 50-percent stake, launched its first domestically produced model, Sergio Marchionne, CEO at Fiat and Chrysler, announced for the first time, plans to localize production for Jeep in China.

The Jeep brand is run by US automaker Chrysler, which was acquired by Italian multinational automaker Fiat in 2009.

In January this year, GAC and Fiat signed an agreement to grow their cooperation in China, saying that Fiat would bring Jeep's production to China. Media reports at the time said that the local production for Jeep was expected to begin in the second half of 2014, with an initial capacity of 100,000 units per year.

Back then it was widely believed that Fiat would produce Jeep vehicles in Changsha, Central China's Hunan Province, where the GAC-Fiat joint venture is located. But now, GAC is having second thoughts on the issue, according to recent media reports.

The reports say that a newly built plant by Fiat and GAC in Guangzhou, South China's Guangdong Province, could very well become the new site for Jeep's production.

Location, location, location

Jeep has produced locally in China before - back when it was owned by American Motors, then the first US automaker to sell vehicles in the country.

American Motors had formed a Jeep joint venture in Beijing in 1979 with State-owned Beijing Auto Works.

Two years after production began in 1985, Chrysler bought American Motors and continued to run Beijing Jeep until early 2009, when Chrysler was acquired by Fiat.

The Beijing joint venture still produces Jeep-like SUVs at present, but no new models since the firm is now completely independent of Chrysler.

As for Fiat's Changsha joint venture, GAC Fiat Automobiles Co, it was officially founded in 2010. The company now produces Fiat's Viaggio model with an annual capacity of 140,000 units.

"To bring Jeep's production to Changsha is a sensible choice," Zhu Bin, an industry analyst at Shanghai-based consultancy LMC Automotive, told the Global Times on Monday, noting that the Viaggio model only reported an annual sales of several thousand so Jeep could make good use of the plant's idle capacity in the future. 

But a notice by Guangzhou Research Institute of Environmental Protection in August has since cast a shadow on the existing theory regarding the location of Jeep's production.

It said that another plant under Fiat and GAC - planned to start operations in 2016, including the production of SUV models in the future - is now under environmental evaluation.

Guangzhou-based newspaper Money Week reported Thursday that GAC has been trying to bring Jeep's production to Guangzhou, a city full of skilled workers, in a decision supported by the provincial government, which sees auto production as a great opportunity to expand the local economy.

An officer surnamed Liu, from Fiat Automobiles Co's production department, declined to comment on the situation by press time when reached by the Global Times, but the Money Week report said that if the two parties cannot come to an agreement, Jeep production at both locations might be an option to consider to appease both sides.

"(But) there's a big chance that the first model will be produced in Changsha. The two parties may be discussing the production location of future Jeep models," said Zhu.

Su Hui, deputy director of the auto market division at China Automobile Dealers Association, noted that to production in both Changsha and Guangzhou could give the companies widespread market advantages in South and mid-West China.

For some, true love

Though most Chinese consumers still view Land Rover as the top SUV brand, Jeep has always attracted a group of consumers with its unique features: a rough exterior, strong four-wheel drive and its popular manual gear.

Jeep fanatic Cai Yin started his relationship with Jeep when he was just a teenager.

"I fell in love with the Wrangler immediately when I saw it in a Marlboro commercial. It was like my first love," said Cai, a 33-year-old white-collar worker in Beijing, who now drives a Jeep Cherokee.

For Cai, Jeep's Wrangler represents the tried and tested SUV.

"It will always be my dream car," said Cai.

Analysts said that Jeep only attracts a very small group of consumers in China.

Even though its sales in China surged 117 percent year-on-year in 2012, retailing some 50,000 units during the 12-month period, its market hold is still considerably weak compared to rival Jaguar Land Rover, which sold 73,347 units for the year.

Zhu said that for Jeep to appeal to a larger customer base, it will need to make some changes to its current image when it starts production in China.

"Jeep needs to produce more crossover SUV-like models in order to cater to the mass market," said Zhu, noting that increasing sales figures will need to be a top priority for the company once local production commences.

However, Su from the China Automobile Dealers Association asserted that Jeep should stay true to its original brand image, even after local production gets underway.

"Jeep shouldn't comprise too much for the mass market. The company should maintain its unique features, which is its major appeal to customers," he said.

Though Cai prefers the authenticity of Jeep's designs, he said that he would understand if the company decided to made some changes to vehicles produced in China to win over more consumers.

But for now, the main goal for Jeep should be to start production as soon as possible, to allow the vehicles entry into the booming SUV market in China while the sector - that saw a growth of more than 40 percent in the first three quarters of the year - is still red hot.

"The SUV market in China is likely to sustain a hyper growth rate for at least five years," said Su. "The sooner Jeep gets in, the better. Even if just a small number of new consumers become interested in Jeep vehicles, given the large base number of customers in China, it will still be a significant win."