Fiat goes to China

In an ever increasing trend, European manufacturers cannot get enough of the Chinese market, and you can’t blame them with statistics showing the Chinese car market is expected to grow by 30% each year for the next five years.

The latest manufacturer to jump on board is Italian giant Fiat. The Turin based manufacturer controls the likes of Ferrari, Maserati and more notably, Alfa Romeo. Earlier this week Fiat signed a deal (a memorandum of understanding) with Chery Automobile Co. the largest Chinese auto producer, to assemble Alfa Romeo and Fiat brand cars, as well as Chery brand cars in China.

The expected production volume will be 175,000 cars annually. The joint venture will be evenly owned by Fiat and Chery with work commencing in 2009. The first of the Italian cars set to undergo a Chinese makeover will be the Alfa Romeo 159 sedan, followed by the 147 five-door variant.

Don’t panic, they are not coming here, yet. The demand in China will account for all the cars for now. Last year Chery alone sold 302,478 vehicles. The company already produces engines for Fiat and has signed an agreement to produce cars for Chrysler for export to Latin America and the United States.

To begin work, cars will not actually be produced locally, but rather simply imported in kit form and assembled at Chery. This is not an unusual move as most invading manufacturers have great difficulty sourcing qualified local suppliers. Eventually the entire development will take place in China.

With the recent appointment of the current executive vice president of Shanghai General Motors, Chris Gubbey as the new GM Holden boss, something tells us Chinese badged Holdens are closer than ever!

Wondering why we are so worried? Just watch a Chinese car undergoing crash testing, click here.