China's fast-growing Chery Automobile Co., Ltd. and Italy's Fiat
Auto have signed an agreement for Chery to supply Fiat with 100,000
engines a year.
The agreement was reached eight months after the two sides signed a
memorandum of understanding on the deal. Chery also signed a deal
with Chrysler Group last month to export the first Chinese-made
cars to the United States.
"The agreement means that Fiat, which has been testing Chery's
engines during the past year, has recognized the technologies and
quality of the engines developed by Chery," said Zhou Biren, deputy
general manager of Chery.
The 1.6 and 1.8-liter engines will be used in cars manufactured by
Fiat in China and abroad, according to a statement on Chery's
website www.chery.cn.
The agreement showed confidence by Chery and Fiat in cooperation
and paved the way for further cooperation, Fiat chief executive
Sergio Marchionne was quoted as saying.
Yin Tongyao, chairman and general manager of Chery, said, "The
cooperation will help improve Chery's competitiveness on the
international market. We are glad to cooperate with Fiat and look
forward to developing together."
Chery became China's fourth largest producer of passenger cars in
2006, with sales of 305,200 vehicles and a 7.2-percent domestic
market share.
Zhou said both Fiat and Chery were exploring further possibilities
of cooperation.
"We have decided to continue to discuss it in detail, since the
cooperation is very important for us both sides and we will have a
lot more issues to consider," Zhou said.
In an interim report, Chery reported exports of 52,712 vehicles in
the first half, compared with 13,548 in the same period of last
year, and the overseas sales are expected to top 100,000 vehicles
for the whole year.
Qin Lihong, vice president of Chery Autos sales arm, said, "Many
Chinese auto brands, including Chery, are upgrading their products
and vigorously seeking to expand their presence in European
countries and other developed nations."
Chery officials said last month at the Fifth China Changchun
International Automobile Fair that Chery's vehicles had proved
competitive in southeast Asia, the Middle East and North Africa,
and the company planned to seek bigger markets in North America and
Europe.
Chinese auto manufacturers, encouraged by robust sales, are seeking
to expand their overseas presence and shed their image as low-grade
vehicle producers.
Wang Ziliang, vice president of another ambitious Chinese automaker
Geely, said "Geely is trying to change its image as a cheap,
low-grade auto producer. It is taking established international
auto brands as a benchmark, and trying to compete with them
globally."
Other Chinese automakers, including Zhongxing, Jianghuai and Lifan
said they are revamping their strategy, and investing heavily in
developing higher-grade vehicles.
China exported 241,000 motor vehicles in the first half, a growth
of 71.2 percent on the same period last year, with Russia the
biggest market.
The combined export value amounted to US$2.7 billion, up 110.7
percent, said Fu Peizhao, deputy secretary-general of the auto
branch of China Chamber of Commerce for Import and Export of
Machinery and Electronic Products, last week.
The per-unit price of China's exported vehicles averaged US$11,200,
up 23 percent on the same period last year.
A total of 38,600 vehicles valued at US$450 million were exported
to Russia during the period, ranking first, according to the
chamber.
Kazakhstan ranked second in China's automobile export market with
6,445 vehicles, while Iran ranked third.
Other countries that imported more than US$100 million worth of
Chinese vehicles included Algeria, Syria, Vietnam, South Africa and
Ukraine.
(Xinhua News Agency August 6, 2007)
