Is Fiat Looking for New Chinese Partners?

by : Anthony Fontanelle

The biggest Italian car manufacturer is reported to be looking for new Chinese partners after its relationship with Nanjing Auto has soured. This came after the alliance between the two sold only 30,300 cars in the Chinese auto market last year. The slow sale of their cars in the region may hinder Fiat to achieve its 300,000 car sale goal for 2010.

Zheng Xiaoli, the publicity officer for Nanjing Fiat Automobile Co Ltd., has this to say: "We have different opinions on the market situation, targets as well as developing strategy with Nanjing Auto. We have different opinions on the market situation, targets as well as developing strategy with Nanjing Auto."

This statement opened up talks whether the Italian car firm will be partnering with either the Shanghai Automotive Industry Corp. or Chery Automobile Co. Ltd. Speculation about the joint venture between the Italian car manufacturer and either of the two Chinese car firms was given more bases after the Financial Times in the country run a story which states that Fiat Chief Executive Officer Sergio Marchionne said that they will quit their partnership with Nanjing.

Fiat is focusing on the production of vehicles equipped with small engines. These vehicles are known for their reliability and exemplary safety which can be complemented by highly efficient . Their limited sales output in the Chinese auto market is blamed on the scarcity of the car models that are offered. This lack of choice in a car manufacturer's lineup also became the reason for Nissan's reduced sale. The Japanese car manufacturer is currently developing new car models to increase their sales output in the global market. Meanwhile, Fiat is yet to announce whether they will be introducing new car models for the Chinese auto market. The introduction of new options for car buyers is seen by industry experts as a good step towards profitability in the Chinese market.

Another cited reason for the slow sale for the joint venture of Fiat and Nanjing is the latter's interest in developing MG car models. It can be remembered that the Chinese car manufacturer has purchased what is left of the controversial British MG Rover. Regarding the impending breakup of the joint venture between the Italian and Chinese car manufacturers, Nanjing declined to comment. Meanwhile, the Shanghai Automotive Industry Corp stated that their current concern is the development of self-branded models and at the same time, worldwide expansion. But the Chinese car firm has yet to comment whether they are interested in a joint venture with the Italian car manufacturer.