Chrysler to build Jeeps in China

New Jeeps are pictured on a lot at a Chrysler/Jeep dealership in Vienna, Virginia April 26, 2012.

DETROIT (Reuters) - Chrysler Group LLC said on Tuesday it has agreed to make Jeeps in China with partner Guangzhou Automobile Group Co Ltd (601238.SS), a key step toward its goal of building Jeep into a global brand.

Chrysler, majority-owned by Fiat SpA (FIA.MI), has not built Jeeps in China since before the Italian automaker took control in 2009. It currently builds all Jeep SUV models in the United States, although one Jeep is scheduled to be produced in Italy in 2014.

"We just signed a cooperation memorandum with Chrysler. We're going to expand our production capability in China," said Zeng Qinghong, vice chairman and president of GAC, on the sidelines of a press event at the Detroit auto show.

"We are going to start introducing Jeep to China and sell it in China," he said. "We are going to enhance our cooperation with Chrysler and Fiat on R&D and components purchasing and the production."

No decision has been made yet on how many Jeeps to build, he said.

Jeep sales rose 19 percent in 2012 to more than 700,000 vehicles, a record. Fiat-Chrysler is counting on building sales of brands Jeep, Alfa Romeo, Maserati and the Fiat 500 to offset losses in Europe.

"I think we have a lot of potential in China," Mike Manley, CEO of the Jeep brand, told Reuters Insider earlier on Tuesday. "For us to make real headway we have to localize our vehicles there."

Manley also said the chief executive of China joint venture Fiat-GAC, Jack Cheng, will move to a new position within the group.

"This is a planned succession," said Manley, who is also the Fiat-Chrysler executive in charge of the Asia-Pacific region.

Manley declined to identify Cheng's successor at Fiat-GAC but said a new chief executive will be announced in February.

(Additional reporting by Bernie Woodall and Yoko Kubota in Detroit; editing by Matthew Lewis)