Guangzhou Auto confirms talks with Fiat for tech tie-up

Shanghai, September 24 (Gasgoo.com) A spokeswoman of Guangzhou Automobile Group Co. (GAC) confirmed on Tuesday that the company is in talks with Italian carmaker Fiat for technological cooperation in making cars in Guangzhou Auto, reported Chinese media today.

Ms. Zheng, the spokeswoman of GAC, refused to offer details about the talks. Media reports since late August have said that Fiat is holding talks with Guangzhou Auto for jointly making cars in China and that Guangzhou Auto, a Chinese partner of Japan's Honda and Toyota, is likely to buy a Fiat platform for developing own-brand vehicle models.

Fiat CEO Sergio Machionne also revealed earlier that his company has been negotiating with many potential partners in China in order to expand its growth in the world's second largest auto market. In August 2007, Fiat and Chery Auto agreed to build a joint venture for making sedans for the Chinese market.

Last month Fiat announced its plan to build a wholly-owned subsidiary in western Chinese city of Chongqing, home to Changan Auto and Lifan Auto, to produce 100,000 light diesel engines annually. Changan Suzuki joint venture is likely to make Fiat Sedici crossover models in China.

"Guangzhou Auto is not a bad partner," said an insider familiar with Fiat. "Although its capacity and sales are now smaller than those of FAW and SAIC, the profit-making capabilities of Guangzhou Auto are extraordinary."