Chery and Fiat To Form Joint Venture in 2008

SHANGHAI - January 4, 2008:

Chery Automobile will definitely establish a partnership with Italian automaker Fiat to build a passenger vehicles in China in 2008, an official from Chery Automobile confirmed recently.

Besides establishing the joint venture, Chery and Fiat also plan to locally produce Fiat Linea, Bravo and Grand Punto after they are imported to the Chinese market, according to Jin Gebo, the director of Chery's administrative office.

This August, Fiat and Chery signed a memorandum of understanding to establish a 50:50 passenger car joint venture and an engine supply contract, but there were no further negotiations reported until very recently, when Fiat announced their pull back from Nanjing Automobile.

Fiat's venture with Nanjing Automobile had been losing money for years; and China's SAIC has achieved a long expected acquisition of Nanjing Auto to follow government calls for the creation of a national champion to challenge foreign automakers in China.

"Fiat aims to boost China sales to 263,000 cars a year by 2010 from 32,000 units in 2006, and will introduce a slew of new models into the country in coming years," Fiat CEO Sergio Marchionne said in a statement.

For more information about the burgeoning auto industry in China please visit http://www.gasgoo.com/Autobiz/list/7/China-News.html