Rough Chinese Terrain Creates Market for U.S. Specialty Products

SEMA News—July 2011

Rough Chinese Terrain Creates Market for U.S. Specialty Products

SEMA Provides Low-cost Innovative Program for U.S. Manufacturers to Meet One on One With Top Chinese Buyers

 

  As in the United States, Jeep heavily promotes the “Jeep lifestyle” in China, holding off-road events for Jeep enthusiasts.
Off-roading is an increasingly favorite pastime in China, creating strong demand for U.S. specialty products for Jeeps and other SUVs.
   
A growing number of Chinese are looking to explore their country’s rougher regions by going off-road, and Jeep sales in China are surging. But China’s terrain is apparently rougher than that found in the United States—or perhaps Chinese drivers are just more radical—because U.S.-built Jeeps are not durable enough for China, an engineer with Chrysler in China told SEMA. That could be an opportunity for SEMA members.

“We take extra suspension struts when we do Jeep Experience trips,” said the engineer. “It’s a durability issue.”

The engineer has suggested that Mopar, Chrysler’s aftermarket parts arm, produce parts in China specifically for the China market. Engineers in China could certify the parts, he said, or an aftermarket company could produce the parts and they could be sold as an aftermarket brand.

As in the United States, Jeep heavily promotes the “Jeep lifestyle” in China, holding off-road events for Jeep enthusiasts. Jeep’s Chinese website features three models—the Grand Cherokee, Wrangler and Compass. All are imported. Chrysler has said that it will introduce the brand-new Jeep Compass and Patriot to China this year.

“In the next few years, Chrysler will bring more Jeep products to the Chinese market so that Jeep will be the number-one SUV brand to cover the most segments in the Chinese SUV market,” said Zheng Jie, president of Chrysler for the Chinese market, speaking at the Shanghai Auto Show in April.

 

 
   
Jeep has 31 dealerships in China, one in each of the provinces (except Hainan Island) and also in the municipalities of Shanghai, Tianjin and Chongqing. In the first three months of 2011, Chrysler sold around 8,500 units in China, up 67%. A model breakdown was not available, but some 60% were Jeep models, according to press reports. In 2010, Chrysler sold 11,317 Jeep units in China, up 75% over 2009.

The Compass was the best-selling model at 7,442 units, up 114%, according to J.D. Power & Associates. Chrysler sold 2,801 Jeep Wranglers in China in 2010, up 59% year over year. All other Jeep models sold fewer than 1,000 units.

In comparison, the Toyota Land Cruiser Prado, produced in China, sold 36,891 units in 2010, up 39%.

Jeep Production to Return to China

Chrysler produced the Cherokee and Grand Cherokee models in China through 2007, but all Jeeps currently sold in China are imported. That will change in a few years. Chrysler will begin producing SUVs built on Jeep platforms using its joint venture with Guangzhou Auto around 2014, said both the Chrysler engineer and a Fiat manager involved with building the new plant, but they also said that the first model would likely be badged as a Fiat. The venture will later begin producing Jeep-badged models.

To learn more about the Chinese market, U.S. specialty-equipment manufacturers are invited to travel to Beijing with SEMA in September to meet one on one with top distributors and retailers from throughout China. To learn more about the SEMA China Business Development Conference, visit www.sema.org/china or contact SEMA’s Director of International Affairs, Linda Spencer at lindas@sema.org.

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