Fiat asks for joint venture permit in China

Shanghai, November 28 (Gasgoo.com) Italian automaker Fiat has submitted its request to China's top economic planning body to forge a joint venture automaker in China, the Jinghua newspaper reported Friday, citing a Fiat source saying.

The unnamed source said Fiat submitted two joint venture projects with Chery Automobile Co and Guangzhou Automobile Group Co (GAIG) respectively and expected the deal to be approved as early as next month.

In addition to the joint venture proposals, Fiat is asking for permission to make the Sedici crossover model at Chongqing Changan Suzuki Co, a joint venture between Changan Motors and Suzuki Motors. Fiat hopes to start selling the car in China next year.

Independent auto analyst Zhong Shi said the current economic conditions are a perfect opportunity for Fiat to apply for such projects, as the government is eager for foreign investments amid slowdowns.

Fiat had an initial agreement with Chery to set up a joint venture in China in July 2007 but then talks began to stall in early 2008 when Fiat pulled out of Nanjing Auto. The two sides also had dissents in products strategies.

In September GAIG is reported to be in talks with Fiat on buying a manufacturing platform from Fiat for own-brand technology development, and the talks have quickly expanded into a full-fledged joint venture partnership.

Due to sluggish sales performance Fiat has lowered its ambitious annual sales target by 2010 in China to 50,000 units from 300,000 set three years ago.