By Namrita Chow
Fiat is planning to make 140,000 vehicles in China in 2012 at a new joint venture plant currently under construction in Changsha, Hunan Province, with distribution supported by the company’s shared logistics organisation with Chrysler. The company plans to increase output by a further 160,000 within two years from that date.
“Our target for the Chinese market in 2014 is 300,000 cars and a market share of 2%,” a Fiat spokesperson told Automotive Logistics News. “Fiat will achieve this by launching both Fiat and Chrysler production in China, using its new joint venture facility in Hunan province.”
The plant in Changsha is a 50-50 joint venture between the Italian carmaker and local state-owned Guangzhou Automotive Corp.-called GAC Fiat Automobile Co.- and involves a joint investment of 500m yuan ($74m).
The new facility will serve as a global production base for Fiat cars and engines. “The production base will develop into a world-leading auto production base integrating the research and development as well as manufacturing of passenger vehicles and engines,” said Fiat’s spokesperson.
Fiat will begin production of a C-class sedan based on the existing Linea currently imported into the country and is likely to have a new name for the China market.
All the vehicles built at the new plant are expected to be for the domestic market but Fiat will also export from other low-cost production centres in Russia and India to support sales in the country.
In the mid-term Fiat has a five-year plan in place that envisages five new products to be launched in China beginning with the C-segment sedan in early 2012.
This will be followed by a second model the following year and by 2015 Fiat plans to enter the large family car segment. “We will enter the D and SUV segments in five years time with, respectively, a new Fiat sedan and two Chrysler Group products,” said Fiat’s spokesperson.
As well as the current Linea model, Fiat imports the Grand Punto and Bravo. Its previous local production joint venture collapsed in December 2007 when Nanjing Auto Corp. was merged into Shanghai Automotive Industry Corp.
Fiat cannot afford any more mistakes in China, so much so that the new management line-up has people with a solid background in China’s automotive industry.
As recently reported by Automotive Logistics News, Jack Cheng has recently moved from being Fiat’s chief procurement officer in China to become CEO of GAC Fiat Automobile as well as being vice president of the Fiat China Global Sourcing Center.
The line-up also includes Jiang Ping, vice general manager of GAC, who will take on the role of executive vice manager of the joint venture. Zeng Qinghong, general manager of GAC, will work as chairman of the joint venture's board of directors, while Franco Amadei, chairman of the Fiat (China) Business Co.., will become vice chairman.
In addition to Zeng and Amadei, the Board of Directors includes Fu Shoujie from GAC, Paolino Gagliardo, head of International Operations Department of Fiat Group Automobiles, and Stephan Ketter, chief manufacturing officer of Fiat Group.