Fiat, Guangzhou Auto to invest EUR 400 mln in new JV

Jul. 7, 2009 (China Knowledge) - Fiat Automobiles SpA, Italy's largest auto maker, and China's Guangzhou Automobile Group Co Ltd (GAC), Monday signed agreements to set up a 50:50 joint venture (JV) in Changsha, the capital of Hunan Province, the China Daily reported.

The agreement was signed in Rome during President Hu Jintao's visit to Italy.

Under the agreement, the two companies will invest more than EUR 400 million in the JV. They will build a plant that will be able to produce 140,000 cars and 220,000 engines each year after the completion of the first phase of the JV, which will have a maximum capacity of 250,000 cars and 300,000 engines annually.

Initially the JV will produce the C-segment Linea sedan. The China-made Fiat cars will be equipped with the latest engine and transmission technology so that the cars will meet the Chinese government's fuel-efficiency and emissions requirements, Fiat said in a statement.

The alliance with GAC is very important for Fiat's overall expansion, Italy's Industry Minister Claudio Scajola said on Monday.