China's Chery and Italy's Fiat Postpone Venture

WUHU, CHINA, March 19, 2009; Fang Yan writing for Reuters reported that China's Chery Automobile Co has delayed a car joint venture project with Italy's Fiat SpA (FIA.MI) because of changing market conditions, its chairman said on Thursday.

"Foreign automakers are affected by the financial crisis and any additional investment will be difficult for them at a time like this," Chairman Yin Tongyao told reporters on the sidelines of a news conference to launch its first mid-to-high-end sedan under a new brand.

"We have slowed down the JV project with Fiat and production will not start this year as previously planned, but we have not shelved the project," he said.

Fiat had an initial agreement with Chery, China's largest homegrown car maker, to set up a joint venture in the country which was scheduled to start production in 2009.

Asked if Chery was interested in buying foreign car brands such as Ford Motor Co's (F.N) Volvo, Yin said he would not rule out such a possibility.

"We may consider a takeover if no one, no other Chinese automakers are interested. We won't fight for it," he said.

Chery is among a few Chinese automakers that have expressed an initial interest in some of the auto brands put up for sale by their cash-strapped owners.

Editing for Reuters by Jacqueline Wong