Fiat
Group and Guangzhou have today officially announced their
new Chinese joint venture which will get underway after
nearly a year of talks with the production of the Fiat Linea
and two engines as it builds towards a 140,000 units per
year production target. For Fiat this represents another
chance to try to crack the lucrative Chinese market after
the dissolution of the lacklustre joint venture with Nanjing
Auto two years ago and the non-starting of another agreement
with Chery Automobile.
"Fiat
Group and Guangzhou Automobile Group Co. Ltd. (GAC Group)
today signed a Framework Agreement to establish a 50/50
joint venture for the production of cars and engines for the
Chinese market," read a statement issued in Turin today.
"The agreement was signed in Rome by Zhang Fangyou, Chairman
of GAC Group, and Sergio Marchionne, CEO of Fiat Group, in
the presence of the President of the People’s Republic of
China, Hu Jintao, and the Prime Minister of Italy, Silvio
Berlusconi.
"Plans
call for the construction of a new plant with a more than
700,000 square metre production area and total investment by
the joint venture of more than €400 million," the Fiat
statement continued. "Upon completion of the first phase of
development, the joint venture will have production capacity
of 140,000 cars and 220,000 engines per year. Plant capacity
could subsequently be increased to a maximum of 250,000 cars
and 300,000 engines per year. Production is scheduled to
commence in the second half of 2011.
"The
models produced will be equipped with the latest in engine
and transmission technology in response to the Chinese
government’s requirement to develop fuel-efficient, low
emission vehicles. The first model to be launched will be
the C-segment Linea sedan," the statement said. China will
become the fourth country to manufacture the C-segment 3-box
Linea sedan after Turkey, Brazil and most recently at the
beginning of the year, India. The Linea is a low-cost model
based on the "international" specification Fiat Grande Punto
architecture which is stretched by 9 cm. Fiat adds that the
joint venture's: "first engines will be the Fire 1.4-litre
with 120hp and the 150hp T-Jet engine."
Fiat's
statement goes on to say: "The plant will be located in
Changsha, the capital of Hunan province, a major road and
rail hub in the heart of south central China, approximately
600 kilometres north of Guangzhou to which it will be
connected within a couple of years by high-speed rail link.
This industrial project is also eligible to receive support
from the development plan recently established by the
Chinese government to promote new investment in six
provinces in central China," Fiat's press release concluded.
