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Chery in talks to tie with Fiat

By Gong Zhengzheng (China Daily)
Updated: 2007-02-01 09:04

Italian carmaker Fiat Auto and China's Chery Automobile are in talks to form closer ties following an engine deal last October, according to an industry source familiar with the situation.

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One option for the two companies is to form a joint venture in China to assemble Fiat cars, said the source, who did not wish to be named.

"Chery will register a new subsidiary to team up with Fiat in an attempt to remain an independent brand," the source said.

Chery, owned by the government of Wuhu in East China'sAnhuiProvince, signed a memorandum of understanding with Fiat in October to supply the Italian firm with 100,000 engines for cars built both in China and overseas.

Chery executives and government officials from Wuhu confirmed the two parties are discussing further cooperation. But they declined to provide details.

Zhan Xialai, Party secretary of Wuhu, last month told China Daily: "Fiat made overtures to us for additional cooperation."