Italian auto giant Fiat appears certain to terminate its joint
venture partnership with Nanjing Automobile Corp. (NAC) after the
Chinese company failed to make its promised investment in the
project, the Shanghai Securities News reported on
Saturday.
"The delayed reciprocal investment and inaction by NAC has been
intolerable to Fiat", Fiat China president Franco Amadei was quoted
as saying.
The report quoted Fiat chief executive Sergio Marchionne as
saying Fiat will no longer put new models into production at
Nanjing Fiat, a joint venture established in 1999 between NAC and
Fiat.
Fiat will also quit from the joint venture's management team,
said Marchionne.
Fiat had previously planned to invest 500 million euros in the
joint venture over five years in a drive toward meeting the
company's 2010 sales goal of 300,000 vehicles in China.
Nanjing Fiat sold only 30,668 vehicles last year and NAC has no
plans for additional investment in the Fiat joint venture as it
concentrates of developing auto brands it owns, said the
report.
In 2005, NAC outbid China's biggest automaker, Shanghai
Automotive Industrial Corp., to acquire the bankrupt British
carmaker MG Rover Group and its engine producer, Power Train Ltd,
for 53 million pounds.
NAC has spent enormous amounts of human and financial resources
on its MG project, said the report.
NAC general manager Yu Jianwei said earlier this year that his
company would need more than three billion yuan (US$390 million)
over the long term to boost MG project.
Amadei said delaying the reciprocal investment in the Fiat joint
venture for two years may give NAC's MG project some breathing room
but by then the Fiat brand will have already lost out on the
Chinese market.
Fiat had also decided not to let Nanjing Fiat produce the D 200
sedan and would "make separate arrangements" for production of the
Alfa Romeo in China, said an insider.
The Italian auto giant is considering Chery as a new partner,
which would produce both the D 200 and Alfa Romeo, said the
report.
NAC unveiled its MG 7 series in Nanjing in March this year,
announcing it would become the first Chinese automaker to
manufacture in the United States by building the MG in Oklahoma
from May 2008.
(Xinhua News Agency June 17, 2007)