Chery, Fiat joint venture talks disrupted

Shanghai, June 11 (Gasgoo.com) An insider recent said that the partnership talks between China's Chery Auto and Italian carmaker Fiat has stalled now as the Chinese automaker's requirements cannot be fully met. Their talks for a joint venture have made no progress since April.

It seems not so easy to reconcile the conflicts that led to the disruption of the talks. According to an insider close to the deal, Chery is now very determined to get the Alfa Romeo, which has been a part of the Fiat Group since 1986, and Fiat will not give up the partnership bottom-line of locally producing its Linea and Bravo cars in China if it aims to achieve the annual sales of 300,000 units.

However, neither Chery nor Fiat has confirmed this dilemma they are in now. "We are still in talks," a spokesperson from Chery said diplomatically. "Premature news release will not help our coorperation." Fiat also declined to comment on the talks. "China is Fiat's important target market, and Fiat will establish a foothold there," said Paolo Arpellino, Fiat Group's chief representative in China.

In August 2007, Fiat and Chery signed a memorandum of understanding to build a 50:50 passenger vehicle joint venture and an engine supply contract, but the talks began to stall in early 2008 when Fiat pulled out of Nanjing Auto. In the joint venture, Chery and Fiat had plans to locally produce Fiat Linea, Bravo and Grand Punto, but Fiat cannot satisfy Chery's desire for another model: Alfa Romeo.