Fiat makes progress in China with 2 partners, RMB3 bln investments and 4 new models

After a long standstill in the cooperation between China's Nanjing Auto and Italy's Fiat, both parties have finally decided to compromise. According to the local media, Fiat will inject an  additional investment of RMB 3 billion into its joint venture with Nanjing Auto and it will also join hands with Chery Automobile, to produce Alfa Romeo in China. Fiat aims to introduce more competitive models through both corporations.

This is a major improvement compared with Fiat’s earlier hesitation to continue its cooperation with Nanjing. Nanjing will need to secured a bank loan of RMB 3 billion RMB, according to a report from Shanghai Securities News.

While Nanjing Auto has been focusing to revive the MG Rover bought over from the bankrupt British automaker, Nanjing has not been keeping its promise to develop Fiat in China. The disappointed Italian giant has resorted to find a second partner, Chery Automobile - China’s fourth-largest automaker, to produce its Alfa Romeo 159.

The Fiat will be sold in China in the form of a CBU

By the end of 2007, the Fiat Grande Punto, Bravo and Linea will be sold in China in the form of CBU (complete build-up) ; these three models and Alfa Romeo 159 will be produced locally by the end of next year. "Late 2008 is our deadline for domestic production. Our main goal is to bring these models to China at the fastest speed," said Douglas Schenk, CEO of Fiat China Business Ltd. However he refuses to give more details on where these models will be produced.

Fiat Group forecasts an overall sales of 2.4 million units by 2010, of which the Chinese market will contribute 263,000 units. Fiat is set to strengthen its business in China which accounts for the lion’s share of growth in 2006.

With a targeted annual production of 20 to 30 thousand units, Alfa Romeo is expected to compete with Audi and BMW. Currently, Alfa Romeo is lagging far behind Audi or BMW in terms of the recognitions from the consumers.