CHANGSHA, China — Fiat's hiatus as a presence in the Chinese auto market is officially over. This week, Fiat and its partner Guangzhou Automobile Industry Group (GAC) kicked off construction of a $733 million passenger-car plant in this city, the capital of Hunan province in central China. Production is slated to start in 2011.
The new GAC Fiat facility, first announced in July, represents the Italian carmaker's return to the Chinese auto market after it ended eight years of cooperation with Nanjing Auto in 2007 due to a failed partnership.
The 50/50 car production joint venture will produce 140,000 vehicles and 220,000 engines annually in the first phase of production startup.
The first model to be produced when production begins in 2011 will be the Fiat Linea midclass sedan. The plant will also build Fiat's 1.4-liter turbo engine.
"It would be impossible for Fiat to rapidly achieve a large market share merely depending on its small cars, where the segment is highly competitive," said Wang Liusheng, an auto analyst from Merchants Securities.
"The rebirth of Fiat in China will also involve brand building and setting up dealerships," he added.
With a limited product portfolio, the Italian carmaker lost its direction in China while soaring vehicle sales boosted the profits and sales of major global carmakers, including General Motors and Volkswagen. The maker of Alfa Romeo cars and Ferrari sports cars has three imported vehicles in the Chinese market now.
Inside Line says: By teaming up with Fiat, Guangzhou Automobile wants to accelerate the development of self-branded vehicles using Fiat's technology. — Vivian Jin, Correspondent
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