More Chery and Fiat Rumors

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There’s more rumbling in Wuhu city today, the home of Chery automobiles. The deal could be that Chery and Fiat enter into a joint venture to build Fiat cars in China, how that will bid with Nanjing, the current partner of Fiat is unknown. Zhan Xialai, the Communist Party secretary of Wuhu city claimed that Fiat made overtures towards Chery, rather than Chery going for Fiat.

Fiat doesnt do all that well in China, its performance in 2006 could be considered weak, although this could be down to fierce competition in the market segment that its entered in. Most Fiat cars in China are below the 100,000RMB level. Fiat makes the Palio and Sienna compacts in China through the joint venture with Nanjing Autos. However, Nanjing and Fiat have only ever had what could be called sluggish sales due to various internal wrangling and a lack of competitiveness, which could be attributed to its small product range.

It seems that Fiat is somewhat unhappy with Nanjing Autos, especially as Fiat sales were down 7% in China in 2006 whilst 7.22 million autos were sold in China last year.