Fiat Looks for Opportunities in China

Fiat had a small but impressive lineup at the Auto Shanghai. The Italian company is trying to revive its local operation and find new partners to cash in on the China automotive boom.

Currently, Fiat has just one small production plant in China: a joint venture with Nanjing Auto, where a small number of Palio and Siena cars are being produced each year. Now that Nanjing Auto is focusing on reviving MG, Fiat is looking for a new angle to make its way in the China market.

At the Shanghai show, many visitors were attracted to the stylish new Bravo hatchback. As Fred Duan, commercial director of Nanjing-Fiat, put it: "When you buy an import car in China, you want something special." Bringing in the Bravo would provide a halo effect for the brand, but it wouldn't be a mainstream product. The midsize Linea — which was the centerpiece of Fiat's stand here — could do that job, but the business case has not yet been made for its local production.

Fiat is also trying to find new partners. Sergio Marchionne, Fiat's energetic CEO, said in a recent interview that his company is "in the position of choosing with whom it wants to develop cars in China." One potential candidate is Chery. The two companies have signed a deal that will see the Italian company using Chery's self-developed ACTECO engines in its China-market models. Chery recently ruled out the possibility of buying Nanjing's stake in the Nanjing-Fiat venture — but there are other options, one of which is for Chery to assemble Alfa Romeos.

Another potential candidate is the largely unknown Zotye Holding. Zotye, which produces a Daihatsu Terios look-alike, recently bought the ailing Jiangnan Automobile plant in Hunan province. According to Zotye officials, the company is in talks with Fiat to assemble up to 100,000 Lancia cars a year at the Jiangnan plant.