Chinesepod - Fiat plans 16b yuan refueling in China

BIZCHINA / Center

Fiat plans 16b yuan refueling in China

By Gong Zhengzheng (China Daily)
Updated: 2007-07-03 09:05

Italian industrial giant Fiat Group plans to spend more than 16 billion
yuan in China in the years to 2010 to help it achieve a fivefold rise in
annual sales revenue in the country.

The money will be put in sectors such as passenger cars, trucks, engines
and spare parts, auto financing and tractors, said Douglas Schenk, CEO of
Fiat (China) Business Co Ltd.

Schenk said the group expects to grow its China sales from more than $1
billion last year to $5.5 billion in 2010, including $3 billion for
passenger cars, $1.5 billion for trucks, $600 million for engines and
spare parts and $400 million for other businesses.

A visitor passes a Fiat poster at an exhibition in Nanjing, capital of
East China's Jiangsu Province. [newsphoto]

Fiat has invested $1.5 billion in China since it built its first plant
locally in 1986.

Andrew Humberstone, chief representative of the group's largest division,
Fiat Auto, said the firm will produce three car models - Fiat Linea,
Grande Punto and Alfa Romeo 159 - in China in the coming years to boost
sales.

The carmaker aims to sell 263,000 cars a year by 2010 from more than
30,000 units last year, Humberstone said.

"Growth potential in China's car market is phenomenal as most customers
are first-time buyers," he said.

But Fiat Auto lags far behind many of its rivals in China in terms of
sales, such as General Motors, Volkswagen, Toyota and Hyundai.

It now runs a car venture with Nanjing Automobile Corp in the eastern
city of Nanjing, making the Palio, Siena and Perla models.

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Fiat Auto has reportedly reached an agreement with another Chinese
carmaker, Chery Automobile Co, to assemble the Alfa Romeo 159 in the
small eastern city of Wuhu.

Last October, Chery clinched a deal with Fiat Auto to supply 100,000
petrol engines to the latter for cars built both in China and abroad.

Iveco, Fiat Group's commercial vehicle division, is building a
40,000-unit heavy truck plant and a 100,000-unit diesel engine factory in
the western city of Chongqing with China's top auto group SAIC Motor Corp
and Hongyuan Motor Co, a local truck maker.

Iveco now has a partnership with Nanjing Automobile to make wagons.

Schenk said Fiat Group has also got the green light from the government
to open an auto financing business in China. The group's China auto
financing branch, based in Shanghai, will provide loans to Chinese buyers
in the first half of next year, he said.

(For more biz stories, please visit Industry Updates)

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