FIAT SAYS: Fiat Group and Guangzhou Automobile Group Co. Ltd. (GAC Group) today signed a Framework Agreement to establish a 50/50 joint venture for the production of cars and engines for the Chinese market.
The agreement was signed in Rome by Zhang Fangyou, Chairman of GAC Group, and Sergio Marchionne, CEO of Fiat Group, in the presence of the President of the People’s Republic of China, Hu Jintao, and the Prime Minister of Italy, Silvio Berlusconi.
Plans call for the construction of a new plant with a more than 700 000 square metre production area.
Upon completion of the first phase of development, the joint venture will have production capacity of 140 000 cars and 220 000 engines per year. Plant capacity could subsequently be increased to a maximum of 250 000 cars and 300 000 engines per year.
Production is scheduled to commence in the second half of 2011.
The models produced will be equipped with the latest in engine and transmission technology in response to the Chinese government’s requirement to develop fuel-efficient, low emission vehicles.
The first model to be launched will be the C-segment Linea sedan. The first engines will be the Fire 1.4i 88kW and 110kW T-Jet engine.
The plant will be located in Changsha, the capital of Hunan province, a major road and rail hub in the heart of south central China, approximately 600 kilometres north of Guangzhou to which it will be connected within a couple of years by high-speed rail link.
This industrial project is also eligible to receive support from the development plan recently established by the Chinese government to promote new investment in six provinces in central China.