Chery rumoured to be buying soon to be closed Fiat plant
Chery are planning for major global expansion in 2010 with impressive plans to open 15 new international factories, one of which is reported to be a former Fiat factory in Sicily.
The news, which was first reported in La Republica newspaper, revealead that Chery are setting themselves up for a major Western European offensive by buying Termini Imerese, a major Fiat production base that is likely to close in the near future.
Later reports have quoted the Chery Chairman, Mr. Yi, as saying “There is no plan of such a sort“, which has left both foreign and media reports unsure as to what exactly is happening. Chery do have small dealings with the Italian car company DR, which sees the Chery Tiggo SUV and Riich M1 hatchback being sold in Italy under the DR brand.
Chery will have 15 oveseas factories by the end of 2009, with the completion of factories which Chery has built with local partners in Argentina, Russia, and Uruguay. Chery is also expected to invest heavily in the Turkish market with a new factory, which could also see models exported into Europe.
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A new auto plant in Western Europe? Can Chery compete while paying Western European salaries? Does Chery have 100~150 cars/assembler/year efficiency to afford paying European salaries?
There is a good reason why foreign auto companies setting up brand new plants in the South of US instead of buying one of a couple dozen closed GM or Ford plants in the North; the labor cost difference is enough to justify constructing a brand new plant instead of buying one of older GM and Ford plants.
Rumor debunked by Wall Street Journal.
http://online.wsj.com/article/BT-CO-20091214-702589.html