The iconic American Jeep brand will be manufactured in China and Italy's Fiat will also build more cars there through an expanded partnership announced Tuesday with Chinese carmaker GAC.

Guangzhou Automobile Group is already building the Fiat Viaggio and distributes imported models such as the Fiat 500, Freemont and Bravo in China.

The expansion will begin with introducing more models from the Fiat portfolio to China "in the coming years," the automakers said in a press release.

"After Fiat, the next brand planned to be localized by the GAC Fiat joint venture will be Chrysler Group's Jeep brand," the automakers said, noting this will include "production in China for (the) Chinese market only."

Chrysler's Jeep brand is currently exporting US-made vehicles to China and last year posted record sales both in China and worldwide.

The new deal "creates the basis for our JV to reach very ambitious objectives in Chinese market," said Zeng Qinghong, general manager of GAC Group.

Mike Manley, who heads both the Jeep Brand and Fiat's Asian operations, said the expansion "will allow us to unleash the potential of both our Fiat and Chrysler Group brands in China."

GAC and Fiat incorporated the joint venture in 2010 and launched the locally-built Viaggio in China in September.

GAC Fiat Automobiles is located in Changsha economic & technical development zone and handles the research and development, manufacturing, sales and after-sales services of vehicle, engines and parts & components.

The plant will have an annual production capacity of 140,000 vehicles in Phase I and will expand to an annual capacity of 250,000 to 300,000 vehicles in Phase II.

It currently is producing the Fiat Viaggio and the 1.4T-jet engine.