Chinese production would help Jeep become more competitive locally.

Jeep unveiled the Wrangler Dragon concept at the Beijing Motor Show last week. The SUV was built specifically for the Chinese market and designed as a way to celebrate the Year of the Dragon.

The American company is still debating whether or not to mass-produce the car. If it is given the green light, it will be built in the United States and imported to China, a process that will undoubtedly add several thousands to its price.

Jeep currently imports all of the cars that it sells in China, but it is looking to change that as soon as possible. The company is in talks with Guangzhou Automobile Group, Fiat's joint-venture partner, to figure out how quickly it can build SUVs there.

There are several obstacles to clear before a Chinese-built Jeep can hit the market. Guangzhou will build several Chrysler and Fiat products in the near future, but it has no extra production capacity to build Jeeps. This means that if Jeep wants to build a significant amount of SUVs in China, it will likely need a new assembly plant.

Another issue is that Chrysler has yet to ask for the Chinese government's approval to build Jeeps in China. According to Jeep CEO Mike Manley, getting the approval might take quite a while.

In spite of these setbacks, Jeep believes that the Chinese market's appetite for SUVs can help it grow as a company. In 2011 it sold 22,294 vehicles there, and it plans on opening no less than 40 new showrooms by the end of this year.

Jeep is partially counting on Fiat to spearhead its Chinese expansion.

"A B-segment Jeep would do incredibly well here in China," said Manley, referring to the Fiat-based SUV that is scheduled to be launched in 2014.

Jeep's history in China goes back to way before the market boomed: the American company was one of the first foreign automakers present on the local market. In the middle of the 1980s, AMC negotiated a joint-venture called Beijing Jeep Corporation that built XJ Cherokees in the Chinese capital.

Photo by Ronan Glon.