Automobiles SpA and China’s Automobile Co. Ltd. reportedly are forming a joint venture to build 175,000 cars annually.
The news comes on the heels of’s announcement that the two companies are finalizing an engine purchase deal, in which will supply the Italian auto maker with 100,000 1.6L and 1.8L engines annually for Fiat cars built overseas.
The car-making JV will produce and distribute Fiat and Chery brand cars and reportedly will introduce the Alfa Romeo brand to China. The start of production is planned for 2009.
“Entering the Chinese market at this stage is a key milestone of our plan to revamp and expand Alfa Romeo business worldwide,” Fiat CEO Sergio Marchionne says in a statement.
Fiat operates in China with six JVs, but has been struggling with its Nanjing Automobile (Group) Corp. partnership.
The Italian auto maker’s goal is to sell 300,000 vehicles in China by 2010, Reuters reports, but it saw only 31,300 deliveries in 2006, short of Marchionne’s target of 40,000 for the year.