Jeep's Indian plans could benefit Australia

FIAT Chrysler Automobiles has announced plans to expand its operations on the Indian sub-continent, which, according to the head of its Australian operations, will have a direct impact on the pricing of the brand’s cars locally.

Fiat Chrysler Automobiles (FCA) Australia president and CEO Pat Dougherty said that the American company will spend $US300 million ($A411m) to expand its Maharashtra plant to produce the Renegade crossover and a new-generation SUV likely to be the sole replacement for the Compass and Patriot twins from 2017.

“We've announced that we've started building the Jeep product in China. And we've announced our plan to expand our India plant for Jeep product,” he told GoAuto at the Chrysler 300 facelift launch in Sydney.

Sourcing Jeeps from a right-hand-drive facility on the sub-continent could protect the local franchise from exposure to poor exchange rates between the United States and Australian currencies, according to Mr Dougherty.

“For us that's huge, because it takes these big currency swings and it balances them out,” he said. “It doesn't eliminate them, because we still have product in North America, but what it does is says we can make more money on these, it doesn't put as much pressure to make money on these from a business perspective.”

The plant, in Aurangabad, already produces the Fiat Linea, Punto Evo and Avventura for the local market, alongside other models from partner Tata. It currently has capacity for 135,000 cars a year, with the new investment expected to double that.

Wranglers and Grand Cherokees will also be assembled at the plant from complete knock-down (CKD) kits for the local Indian market from late 2015.

The news follows on from recent announcements from FCA late last year confirming its expansion into a manufacturing deal to build Jeeps with Guangzhou Auto.

“It's really exciting for us because it's really new and (happening) soon,” said Mr Dougherty. “We're already building Cherokees in China, so there are other products that are planned for that operation up there.

“And it says that we'll be a presence in this market, a bigger presence than we are today. We're planning the future. It's exciting, it's good.”