Fiat considers a second auto plant in China

Article by Christian A., on September 24, 2012

Fiat is thinking about a plan to build a second auto plant in China as part of its expansion in this country as it reduces its investment in the struggling European market. When interviewed in Shanghai, Jack Cheng, general manager of Fiat's joint venture in China with Guangzhou Automobile Group Co., said that it may open another manufacturing site in the south.

Fiat CEO Sergio Marchionne is hoping to increasing sales in China in order to offset the losses in Europe. Fiat is cutting its expenses in its domestic market this year by 500 million euros to save cash, with demand in Europe expected to decrease for a fifth consecutive year. In the first half, Fiat's mass-market brands reported losses of 354 million euros.

Marchionne, who has been leading an industrywide effort to shut down excess assembly lines in Europe, has announced that he will close a second Italian factory unless he discovers a way to export vehicles to the U.S. Fiat will be introducing a plan to stop losses in Europe at the end of October. Fiat has has two partnerships in China but they failed. Eventually, Fiat began sales of its first China-made vehicle, the Viaggio compact, on Sept. 16.

Cheng said that Fiat intends to release one new model every year in the country and will present an SUV in 2014. The Viaggio has a starting price of 108,800 yuan (13,234 euros), according to Jiang Ping, executive deputy general manager of the joint venture, GAC Fiat Automobile Co.

As many as 140,000 cars can be produced by the venture's factory each year. Furthermore, the company offers three imported models in China: the Bravo hatchback, the Freemont SUV and the retro-styled 500 minicar.

Topics: fiat, china, plant

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