Chery to build Alfas in China

It is reported that the negotiations between Italian auto giant Fiat and Chinese automaker Chery have come to fruition recently, and the two parts will form a new venture in China to assemble Alfa Romeos. What is not yet clear is the role that Nanjing Auto might play in such a partnership.

Right now the only deal between Fiat and Chery is an engine partnership. In late 2006 that partnership was expanded so that Fiat could buy up to 100,000 Acteco gasoline engines from Chery annually. Fiat said the to-be-sold Linea model will be equipped with the engines.

Nanjing recently began assembling the MG TF roadster and has signed a letter of intent with the owners of the Austin-Healey brand to revive that storied British marque. Fiat has complained in earlier reports that its Nanjing joint venture put less and less focus on Fiar brand promotion in China. Looking for deeper cooperation with Chery would fit in nicely with Fiat's target of selling 300,000 units in China after some uneasy cooperation with Nanjing Auto.

Nanjing Fiat Automobile Co Ltd has reported that cumulative sales of its small-sized Perla, Siena, Palio and Weekend sedans in China totaled 31,300 units last year, and sales for the first for months this year were 7,529, down 36.4% y-o-y.