Shanghai, March 18 (Gasgoo.com) The Guangzhou-Fiat joint venture has been officially approved by the Chinese government and will start production of Fiat vehicles in central China by September 2011, China Car Times said earlier this week.
The 50:50 venture will be based in the Changsha Economic Zone, central China's Hunan province, and the project will have an investment of 5 billion yuan ($732 million). The auto-making JV is expected to start operation by September 2011 after new factories are built, machinery imported and locally sourced.
The venture will produce the Fiat Linea at first, which will be the first Fiat car to be produced in China since the Fiat's joint venture with Nanjing Auto terminated in 2007. The Linea was chosen for production first as it is the best car in the Fiat line-up to meet Chinese expectations.
The Guangzhou-Fiat venture will include car production, engine production, and an R&D center. Fiat is aiming to produce 140,000 cars per year at first and then lift the capacity to 250,000 units. Engine production will start at 220,000 units and later rise to 300,000 units.
Vehicles made by the Guangzhou-Fiat venture will come to the Chinese market by late 2011, to be sold by dealers who sell imported Fiat cars in China. These dealers will be merged into a new Fiat network which will not sell vehicles made by Guangzhou Auto.
Guangzhou Auto reached a deal in May 2009 to buy a 29% stake in Hunan Changfeng from Changfeng (Group) Co. to become the SUV's biggest shareholder, set to restructure the Changsha-based Changfeng Motors.
