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Guangzhou Auto to buy Fiat platform for own brands



Shanghai, September 23, 2008 ( Guangzhou Automotive Group Co (GAC) now is in talks with Italian carmaker Fiat on technology cooperation, which includes GAC buying a manufacturing platform from Fiat for own-brand technology development, China Business reported last Saturday, citing sources of Fiat.

Fiat China's public relations director, Zheng Xiaoli, told the newspaper that the two parties are still in talks and no details could be disclosed. Also no comment was available from GAC.

The technical cooperation between GAC and Fiat truly involves platform purchase, a Fiat subsidiary source said. It may be the 178 platform which the previous Nanjing Fiat eliminated, a source close to GAC disclosed. CEO Kevin Chen said that an automobile platform is a combination of soft technology containing dimension, research data and some other factors, but the chassis is just a sample, so it is almost impossible to gain upgrading for own-brand products through borrowing the chassis.

"As we couldn't cover everything, we can look for opportunities to make use of others' technology to combine with ourselves," GAC chairman Zhang Fangyou made his "borrowing strategy" quite clear.

However, a realistic discrepancy is that the GAC intended platform represents different position from its own-brand models. GAC own-brand products are positioned at 2.0L-2.5L mid- and high-level sedan, but three Fiat 178 platform-born compact cars are all 1.2L-1.5L models, so the position differences can be clearly seen, an unnamed source said.

According to Kevin Chen, GAC is likely to begin research of own-products out of mastering the platform technology initially by purchasing Fiat's out-dated platform. It also suggests how difficult to get a platform, he added.

Whether GAC can develop its own-brand products well by Fiat's platform depends on GAC's efforts afterwards.

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