News: Italian automaker Fiat is set to build Jeep vehicles at a new factory in Guangzhou, China, with a production capacity of 160,000 vehicles annually, China Car Times reports. Guangzhou Fiat will use its facility in Changsha, which holds a capacity of 140,000 units, to manufacture the first Jeep Cherokee in China. The move comes after years of Fiat pushing for a new factory to build Jeep vehicles in the country. To aid Jeep production, Fiat plans to increase the number of Jeep dealerships to 200 by the end of 2013, up from 150.
BMI View: As Chinese wages have continued rising over the years, China's attractiveness as a manufacturing and export hub, on the back of cheap labour, is diminishing. Our long-term auto production forecasts take that into account and we see them growing in line with our auto sales forecasts, mostly to satisfy domestic demand as exports are likely to enjoy slower growth rates in the coming years.