Fiat (Chrysler) and Chinese Carmaker Form Alliance

Washington DC July 7, 2009; The AIADA newsletter reported that the Fiat Group announced a 50-50 joint venture on Monday with the Guangzhou Automobile Group to make cars and engines for the Chinese market, the latest move by the Italian automaker to expand outside its home market.

According to the New York Times, the companies said they would build a 173-acre plant in Changsha, in Hunan Province, at a cost of more than $556 million, with production set to begin by the end of 2011. Upon completion of the first phase of development, the venture will have the capacity to make 140,000 cars and 220,000 engines a year.

The companies said capacity at the plant, which will make fuel-efficient, low-emission vehicles, could eventually be increased to 250,000 cars and 300,000 engines a year. Fiat, which drew in $83 billion of revenue last year, acquired a controlling 20 percent stake in Chrysler in June to gain access to the North American market.

The Guangzhou Automobile Group, a state-owned holding company, had 2008 revenue of $16 billion. The company, which already has joint ventures with major partners including Honda and Toyota, said it delivered more than 530,000 cars to customers last year.

Click here for more information on Fiat's alliance with Guangzhou Automobile Group.