Fiat's new JV in China to sell vehicles in 2011

Italian automaker Fiat Spa recently said that its joint venture with China's Guangzhou Auto will start producing and selling Fiat vehicles in 2011, reported Shanghai Securities News today.

The Guangzhou-Fiat joint venture project is expected to get China's regulatory approval later this month, and construction on the project is scheduled to last one year and a half. The venture may start production and sale of Fiat vehicles by the second half of 2011.

Fiat signed an agreement on July 6 with China's state-owned Guangzhou Automobile Group Corp. to produce cars in a joint venture, which will have an investment of 400 million euros ($556 million). Sources revealed that besides the Linea model, Alfa Romeo and other Fiat models may be built in this Chinese venture.

Vehicles made by the Guangzhou-Fiat venture will be sold by dealers who sell imported Fiat cars in China. These dealers will be merged into a new Fiat commercial network. However, this sales network will not sell vehicles produced by Guangzhou Auto.

Initially, the Guangzhou-Fiat venture will have an annual capacity of 140,000 cars and 220,000 engines, which will be later expanded to a maximum annual output of 250,000 cars and 300,000 engines, Fiat said.

In late 2007, Fiat terminated its joint venture with Nanjing Auto which was soon merged by China's auto giant SAIC Motor. Since then, Fiat has maintained its presence in the Chinese market by selling imported models and seeking a new partner.