Automotive News
After months of negotiations, Fiat Auto and Chery Automobile have officially established a joint venture to assemble cars for both companies at a new factory here, beginning in 2009. The plant will have an annual production capacity of 175,000 and will assemble such vehicles as the Alfa Romeo 159 and 147 sedans, as well as some Fiat and Chery models, primarily for the China market.Earlier, Chery signed an agreement to supply Fiat with up to 100,000 engines a year. The 1.6- and 1.8-liter four-cylinder engines will be used in Fiat cars assembled in China and other countries. Fiat still maintains a modest joint venture with another Chinese firm, Nanjing Auto, which is in the midst of merger talks with larger Shanghai Auto. That venture last year built about 45,000 Fiat Palio, Perla and Siena compacts.
Chery, meanwhile, has agreed to supply cars to Chrysler for sale in markets outside China, including North America, under the Chrysler, Dodge and Jeep brands.
The Fiat/Chery venture will mark the first assembly deal for Alfa in China.
"Entering the Chinese market at this stage is a key milestone in our plan to revamp and expand the Alfa Romeo business worldwide," said Sergio Marchionne, chief executive officer of Fiat Auto. "The cooperation with Chery will also further development of the Fiat brand in China."
Fiat executives in recent weeks have said the company plans to spend more than $2 billion in China and expects to boost annual vehicle sales there to more than 250,000 by 2010.
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