Jeep Isn’t Performing as Expected in Chinese Market
Chinese-Built Renegade and Cherokee Models Don’t Suffer a 25% Import Tariff, but Still Aren’t Selling as Expected.
The Chinese market is a bit interesting to dissect, automotive segments even more so. China currently slaps down a 25% import tariff on any car imported into the country, which is why FCA opened up a small car and SUV production plant over there.
Avoiding the import fees should give them a competitive edge, but many Jeep dealers across the country are reporting struggling sales. Volkswagen has the real stronghold in the Chinese market, with over 20 models made in China, and over 3.5 million in sales. With 130,000 in final sales for 2016, FCA accomplished just a fraction of that.
Sergio Marchionne has some big ambitions by 2018, however. Sales goals of 500,000 units are expected, which is a huge jump for a span of only 24 months. Luckily for Jeep, the SUV market in China is the most quickly expanding segment of cars. As their economy is growing, more and more owners are looking for larger and upscale rides.
Dark forecasts shouldn’t be the impression here, though. Year-over-year performance wise, 2016 is proving to be better than last year’s slight decline in sales. FCA still has a long journey ahead, but the conditions are ripe for a good sales year ahead.
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Via [Wall Street Journal]
