The The Termini Imerese factory in Sicily currently builds the Lancia Ypsilon (since 2005) and has a production capacity of 400 units a day. In 2006 the threatened plant built its four millionth car.

It’s been another week of twists and turns for Fiat’s closure-threatened Termini Imerese factory in Sicily with three Asian carmakers, China’s Chery Automotive and India’s Tata Motors and Mahindra & Mahinhra all linked with buying the plant which is scheduled to cease car production in 2011. Both Chery and Mahindra & Mahindra denied any interest in acquiring Termini Imerese response to the media speculation while Tata Motors said that it didn’t speculate on talk such as this.

The week kicked off with Italian daily newspaper La Reppublica claiming that Fiat was in talks with Chery Automotive over plans to sell Termini Imerese, the smallest of Fiat’s six factories in Italy, to the ambitious Chinese carmaker. Chery Automobile’s President Yin Tongyao was quick to dismiss the rumour, or show any interest in making overseas acquisitions, in an interview with sohu.com:

"We have been offered many fancy proposals [from investment bankers]. Their business is to buy and sell," Yin Tongyao told the China-based website. "They want you to get married today and split the next day, this is typically what investment bankers do, and we won't be hoodwinked." He was forthright in putting the brakes on a purchase of Termini Imerese, adding: "I was told that foreign media said we had bought a Fiat plant; there is no such thing."

That link was followed by a newspaper report that two Indian carmakers, Fiat’s joint venture partner Tata Motors and Mahindra & Mahindra were locked in separate talks with Fiat over buying the Sicilian factory which currently builds the Lancia Ypsilon (since 2005) and has a production capacity of 400 units a day. In 2006 Termini Imerse built its four millionth car. India's respected Business Standard claimed that talks were going on, quoting unnamed senior officials that it said were part of the entourage of Italy's minister for economic development, Claudio Scajola, who is on an official visit to India this week. Scajola told the newspaper he was unaware of this development, but added: "Indian investors, including Tata Motors and M&M are welcome in Italy." Mahindra & Mahindra were quick to deny that it was interested: "We are not interested in that plant," a spokesperson told MF-Dow Jones, while a Tata Motors spokesperson said: "Tata Motors does not comment on such matters."

Termini Imerese has a strong historic tradition of building important Fiat Group models having previous turned out the Grande Punto, Panda and 126. It is located in a major unemployment black spot and losing the lifeline of the factory would be highly detrimental to the region. Reports often quote figures that claim due to its island location it costs around 800-1,000 euros more per car to build at Termini Imerese than elsewhere. Recently Scajola drew up firm battle lines by saying that Fiat would be "crazy" to think of shutting the factory.

Meanwhile the National Secretary of the powerful FIOM union which represents many Fiat workers, Giorgio Cremaschi, is also applying the pressure this week, saying in an interview with news website Affaritaliani.it that: "Fiat has broken its pact with Italy, because it produces around 2,400,000 cars of which only 650,000 thousand [are built] in our country. Adding that Fiat is "the only major car manufacturer who produces more abroad than in their country of origin. It is unacceptable."