Under the deal the two firms have agreed to bring a localised Chrysler product to China, adding it to the existing Fiat brand. GAC Fiat will have access to the Fiat and Chrysler brand products announced during the FCA May 2014 Investor Day.

The move was previously mentioned as part of the five-year plan announced by chief executive Sergio Marchionne at the Chrysler division’s headquarters in Auburn Hills, near Detroit, in May.

GAC Fiat also reaffirmed its commitment to a full sport-utility vehicle (SUV) offering through the Jeep brand with the localised production of three new Jeep models by the end of 2016. By 2018, the Jeep brand’s portfolio in China will range from subcompact SUVs to full-size luxury SUVs.

As part of the preliminary agreement, GAC and FCA will start work on the ‘aggressive network expansion required to support the development of SUVs through Jeep and passenger cars through the Fiat and Chrysler brands’.

The firms said the best-performing dealers from the two existing networks in China will form the basis of both the Jeep SUV network and the Fiat /Chrysler passenger car network. Further investors will be required to support the doubling of both networks by 2018.

‘China is a market of strategic importance to FCA in the next five years,’ said John Kett, general manager of Fiat Chrysler APAC and head of the Jeep brand APAC, Fiat Chrysler Automobiles.

‘Collectively the import brands of Chrysler, Jeep and Dodge, in addition to the localized brands of Fiat, have the group ranked as the fastest growing brands in China. This plan will accelerate our volume and market share growth at significant speed, and will enable us to deliver the commitment that we laid out on this year's FCA investor day by growing our sales volume in China to 760,000 by 2018.’