Guangzhou-Fiat may get business license in Oct

Fiat and Guangzhou Auto are hoping to receive their business license for their recently minted joint venture later this month according to recent news reports.

This is Fiat’s second joint venture agreement in China after its first joint venture with Nanjing Auto died a fiery death in December 2007, with accusations from both parties saying that each other was to blame for the JV’s demise.

Fiat first entered into China with its Palio model that was quite different to anything else on the road at that time. Unfortunately Fiat failed to keep up with the times and soon found its Palio hatch, sedan, and wagon models outpaced by the competition. Issues flared when Nanjing Auto took over MG and sent its best engineers and designers over to MG to work on their latest project.

Fiat since courted many a Chinese automaker with temptations of technology transfers and joint ventures, Chery was one of those that Fiat struck up talks with but the deal ultimately fizzled out, as did a rumoured deal with Zotye.

Guangzhou Auto recently bought technology from Fiat on which to build its own line of autos that are expected to be produced in 2010, from then on Fiat and Guangzhou held further talks which ultimately blossomed into the JV that they have now.

Guangzhou-Fiat have already submitted their proposals for the 550 million USD joint venture to the central and Guangdong local governments for approval, which they hope to receive this month as work on a factory that Fiat will move into has already begun in earnest in Guangzhou.

The Guangzhou-Fiat JV is expected to be fully producing cars by 2012 and will see 140,000 cars being made in its first year.

Although Fiat is coming back to the party after an early leave, it should take note that Nissan only signed up with Dongfeng in 2003 and sold 320,000 cars in the first 8 months of 2009, its clear that with Fiats highly desireable model line up they could easily clear their intended goal of 140,000 cars in the first year.

(China Car Times)