Fiat says JV project talks with Chery put on hold

Shanghai, July 13 (Gasgoo.com) A top executive of Fiat China said yesterday that the talks between Fiat and Chery Auto about their future joint venture project have been put on hold, and Fiat has no immediate plan to seek another Chinese partner after Guangzhou Auto, Beijing Times reported today.

After the Italian automaker signed a joint venture agreement with Guangzhou Auto earlier this month, Chery Auto's spokesman said that his company is still in talks with Fiat though currently there is little progress to be announced. However, this statement has been denied by Fiat China.

Franco Amadei, Chairman of Fiat China, told reporters yesterday that Fiat SpA Chief Executive Sergio Marchionne and Chery Automobile Co., Ltd. Chairman Yin Tongyao met several months ago to discuss this issue and decided to suspend the Fiat-Chery joint venture project, and therefore the JV talks have came to a halt.

The Fiat China chairman said major reasons behind the Fiat-Chery JV project suspension are the financial crisis, each having many things to do, such as Fiat's buying of Chrysler and setting up a venture with Guangzhou Auto, and Chery's focus on developing numerous own-brands. Fiat has no plan yet to seek another Chinese partner in the near future, he added.
 
In August 2007, the two companies agreed on a 50/50 joint venture to produce 175,000 passenger vehicles per year beginning in 2009. Chery recently said the production "won't happen this year" but both carmakers said the possibility of their future cooperation is not ruled out.