Alfa Romeo Coming to China: a Good or Bad Idea?

by : Evander Klum

The Alfa Romeo is one of those vehicles that you just got to respect. Even Henry Ford, the founder of Ford Motor Company and father of modern assembly lines just couldn't help expressing his fascination for Fiat's luxury brand. He said, "When I see an Alfa Romeo go by, I lift my hat."

And now the same magic will soon touch the Chinese market with the coming of the Alfa Romeo and it's made possible through the joint venture of Chery Automobile and Fiat. The Wuhu-based manufacturer said that they are planning to roll out 175,000 cars a year. Production is scheduled to start from 2009 with models from both Fiat and Chery to be distributed in China.

Prior to the agreement the Italian manufacturer of has signed a supply contract with Chery for 100,000 engines a year fortunately for the Wuhu-based manufacturer, Fiat has also seen the venture with Chery as an attractive opportunity to expand market in China.

According to Fiat Chief Executive Sergio Marchionne, "Entering the Chinese market at this stage is a key milestone of our plan to revamp and expand Alfa Romeo business worldwide. At the same time, the cooperation with Chery will also materially benefit Fiat brand's further development in China."

But of course how the Chinese car buyers will react on the Fiat's luxury brand is still something to be seen especially with the fact that the Chinese market is already flooded with various brands competing aggressively with each other. It can be noted that Fiat has been trying hard to gain a share in Nanjing starting 1999 and unfortunately for the Italian carmaker its venture in China market has only resulted to slowing down of sales. With its new contract with Chery it is hoping that things will change for the better.

An auto analyst from Global Insight by the name of Pierluigi Bellini said, "Fiat until a few years ago wasn't really concentrating on China. It was concentrating on restoring the brands. Now they are trying to go back to China." He also added that the main problem that Fiat is facing in China is brand recognition since it's not as famous there as it was in Europe. And with the coming of Alfa Romeo in China it's going to be interesting to see how Chinese car buyers will accept its presence.

Doubts are also raging among the Fiat investors on the viability of the company's venture in China causing shares to drop by 49 eurocents or 2.4 percent to 19.80 euros.