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By John Reed in London and Geoff Dyer in Shanghai

Published: May 23 2007 22:39 | Last updated: May 23 2007 22:39

Fiat “missed an opportunity” in China and is considering scrapping its joint venture with Nanjing Automobile Corp in favour of an alliance with another local carmaker, according to its chief executive.

Sergio Marchionne said Nanjing Auto had been “distracted” by its efforts to relaunch the MG brand, which is due to begin production at MG Rover’s former plant in Longbridge, England, next week.
 

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Fiat doesn't make very interesting cars at all; whether they are Made in China or Italy. Chinese buyers like Volkswagen, and for good reason. That is the benchmark that the Chinese car companies must model themselves after (but without copying!). They are slowly learning.
 

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Nanjing may end Fiat JV

CHINA: Nanjing may end Fiat JV - reports
25 May 2007 | Source: just-auto.com editorial team

MG brand owner Nanjing Automobile Group is in discussions with Fiat about possibly terminating a passenger car joint venture in China.

"We are in discussion with Fiat," Nanjing Auto's spokesman Liu Ningsheng told Bloomberg News in a mobile phone text message that gave no further details.

The Financial Times earlier had reported that Fiat may end its venture with Nanjing Auto, choosing instead to assemble vehicles with either SAIC Motor Chery Automobile. The paper cited Fiat CEO Sergio Marchionnewho has recently expressed frustration over the JV's lack of progress (see link below).

The equally held Fiat venture with Nanjing Auto, established in 1999, makes Perla and Siena sedans, Palio compact cars and Palio Weekend station wagons.

First-quarter sales fell about 21% to 7,082 units, lagging behind the 22% growth by the entire Chinese passenger car market, Bloomberg News added.
 

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Marchionne pulls no punches as Fiat plans to Chery-pick a new Chinese partner

EMERGING MARKETS ANALYSIS: Marchionne pulls no punches as Fiat plans to Chery-pick a new Chinese partner (NEW: hear an interview)
11 May 2007 | Source: just-auto.com editorial team


view 2 related images

Fiat looks set to scrap its Chinese partnership with Nanjing Automobile Corporation in the near future following an extraordinary attack on the Chinese company by Fiat CEO Sergio Marchionne, writes Mark Bursa.



Speaking at the launch of the Fiat Linea sedan, a car that Fiat wants to build in China, Marchionne pulled no punches in his criticisms: "I'm fundamentally displeased with the level of interaction with Nanjing on the passenger car project," he said.

Now it looks increasingly like Fiat will exit the Nanjing operation and set up a car production deal with rival Chinese firm Chery, with which Fiat already has an agreement on engine supply. "If we can't get a conclusion with Nanjing we'll look at alternative arrangements."

Marchionne said he had made several trips to China over the past three years in a bid to kick-start the struggling Nanjing Fiat project, which built just 31,300 Palio, Siena and Palio Weekend models last year, 13% fewer than in 2005, and well below the venture's current capacity of 100,000.

"I'm not going to China to look at the tourist attractions," said a clearly frustrated Marchionne, who had stonewalled earlier questions about the Chinese project but finally responded when a Chinese journalist put him on the spot.

"I have personally devoted a large amount of time to attempt to resolve the huge differences that would allow Nanjing Fiat to grow to [a sales target of] 300,000 cars a year by 2010," he continued. "All those efforts remain unanswered to this day."

Marchionne said that despite three years of negotiations there was "no agreement on a product portfolio for China". He blamed Nanjing's acquisition of MG Rover as a major cause of the problems: "They have been distracted by other brands that are of no interest to us," he said.

Nanjing relaunched the MG brand at last month's Shanghai_Auto Show. The Chinese company was the surprise winner for the assets of the collapsed UK automaker in 2005. The Chinese company paid $92m for the MG brand, the design rights to the TF sports car and manufacturing equipment from the Longbridge plant.

Nanjing is China's oldest automaker with a history stretching back to 1946. It started production of the Palio from CKD kits in 2001 - just before the automotive industry boom. But sales have struggled against more aggressive rivals, and Fiat has failed to establish a footprint in China.

Indeed, relations look to have broken down completely. Chinese media reported Nanjing chairman Wang Haoling as saying: "I don't think Fiat has a good understanding of the Chinese market," and this remark is likely to have pushed the relaxed Marchionne to breaking point.

Chery represents a much more ambitious and progressive partner. It is a much younger and more entrepreneurial business than Nanjing, and has already demonstrated a willingness to build partnerships with western companies through its deal with DaimlerChrysler, which will see it building the Dodge Hornet small car under contract for supply to the West, in return for technology transfer to allow it to build Chery-brand small cars on the same platform.

And last October, Chery signed a MoU with Fiat to supply 100,000 Chery-designed 1.6- and 1.8-litre gasoline engines for Fiat cars built both in and outside China. When he announced the deal, Marchionne praised Chery as "a young and modern company with a solid technical background". Under Chinese Government rules governing the auto industry, local producers can form alliances with up to two foreign carmakers - so Chery would be likely to win approval for a Fiat JV alongside its DaimlerChrysler deal.

Targeted alliances are very much part of Marchionne's strategy: "Fiat is open to the concept of cooperation with everyone," he said. Already talks with Chery have progressed beyond engines - regardless of the outcome of the Nanjing spat, Chery is likely to be chosen to build Alfa-Romeo models in China. "In the relation with Chery we see the potential for a wider co-operation both in powertrains and, eventually, in other automotive sectors," Marchionne said last year.

What Marchionne would like to see is a smooth handover of the Nanjing business to a new investor, and this could bring another option into play - Shanghai Automotive (SAIC), which has been at loggerheads with Nanjing since its smaller rival gazumped it for control of Rover's assets. Nanjing owns the intellectual property of the Rover designs and has produced its own versions of the cars under the Roewe badge.

SAIC has far greater industrial clout than Nanjing, which has struggled to raise the funds to complete the MG relaunch. However, its hokey Roewe brand is unusable as an export nameplate - especially with the Rover nameplate now owned by Ford.

SAIC chairman Hu Maoyan has made no secret of the fact that he'd like the MG brand, and actively courted Nanjing at the recent Shanghai Auto Show: "We are looking forward to cooperation with Nanjing," Hu told the Financial Times. "We need to use state assets more efficiently and effectively. We believe the leaders of Nanjing Auto are smart enough to understand this principle."

An SAIC takeover of Nanjing is one possible option - and that could put the Nanjing-Fiat operation in SAIC's hands. However, SAIC already has JVs with General Motors and Volkswagen, so this could prove problematic. However, SAIC has historic links with Chery - it was a shareholder in Chery until GM forced it to sell its stake three years ago after the design piracy dispute, when Chery launched the QQ minicar, a 'lookalike' of GM's Matiz model. So a compromise solution could be reached.

The smart money is on a Fiat-Chery deal, and sooner rather than later. Marchionne wants to get the Fiat Linea into production in China as quickly as possible, and Chery surely represents the best way to achieve this. And judging from his recent performances, what Marchionne wants, Marchionne gets.


Mark Bursa
 

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Fiat are rising in almsot all countries .. here the was a JV with a local compay that used to build the Sienna / Albea Sedan cars for over 6 years , with being one of the bes selling cars in Egypt in 2000 ( The Sienna is the SEDAN version of the PALIO ) . but ODDLY ! Fiat pulled the trigger on the Project , I can't remmember the reasons , And the whole project collapsed.

Now they are back but as IMPORTED only with some new models :
Palio G3 / Palio G2 / Uno Fire / Sienna G3 / Albea G3 / Punto G3 and Grande Punto .

But the prices are abit high comapred to japaneese and korean marks , Still however Fiat used to be a NATIONAL brand name in Egypt.

You call still see Fiat 128 / 127 / 131 / 132 / Ritmo / Regata / Siennas and Alfas/Lancias as well roaming arround you more than you want to see them :p
 

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This is really sad for Fiat. They were the first to go to Eastern Europa, Africa, South America... But they just missed China.

About Nanjing and Fiat, I just heard about all kind of news, just as with Chery and Chrysler...
 

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I suspect Nanjing are quite happy to get rid of Fiat as they have ambitious plans for MG, Austin and Austin Healey. They don't really need Fiat anymore. I'd play hard ball if I were Nanjing and switch all the dealers over to MG as soon as the venture was terminated... :)
 

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Nanjing Fiat new partnership

Nanjing Fiat gets investment from parents
(Xinhua)
Updated: 2007-07-01 09:26

China's Nanjing Auto and Italy's Fiat have decided to breathe new life into their partnership by respectively investing an additional three billion yuan (US$389.6 million) in their joint venture Nanjing Fiat.

There had been reports that Fiat was likely to end its partnership with Nanjing Auto as the Chinese company delayed investing in the joint venture despite the Italian auto giant's plan to invest 500 million euros over five years in a drive toward meeting its 2010 sales goal of 300,000 vehicles in China.

Fiat chief executive Sergio Marchionne said earlier this month that his company would quit from Nanjing Fiat's management team and no longer let the joint venture produce new models, including the D 200.

With the help of the government departments in Jiangsu Province, the two companies become reconciled but Nanjing Auto, with its financial resources concentrated on the MG project, would have to turn to bank loans for the investment, Saturday's Shanghai Securities News reported.

In 2005, Nanjing Auto acquired the bankrupt British carmaker MG Rover Group and its engine producer, Power Train Ltd, for 53 million pounds. The Chinese company unveiled its MG 7 series in March this year.

To make a concession, Fiat decided to put the D 200 into production at Nanjing Fiat, said the report, without giving details about the timing.

Lack of capital was not the main reason for the delayed investment by Nanjing Auto because company chairman Wang Haoliang previously insisted that Fiat should not cooperate with Chery, another Chinese auto maker, and the Chinese-made D 200 and Alfa Romeo should be launched in Nanjing Fiat, said the report.

"Before August this year, however, Chery and Fiat would hopefully announce their cooperation," said the report.

http://www.chinadaily.com.cn/bizchina/2007-07/01/content_907064.htm
 

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I personally think NAC would be better off just focusing on MG at the moment and the possible merger between themselves and SAIC.
 

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Nanjing Auto, Fiat may go to divorce next month, company source says.

Fiat and Nanjing Auto Corporation will officially put an end to their relations next month, Chinese newspaper Beijing Youth Daily reported today.
"The two sides have reached a consensus that they will officially put an end to the joint venture next month and the agreement will be made public soon,” a Fiat source told the newspaper.

However, Duan Jianjun, Chief Business Officer of Nanjing Fiat Auto Co said that the negotiations are still under way. “No matter what results may come out at last, Fiat is determined to expand its operations in Chinese market. In fact, we are in talks with other Chinese automakers too.”

Another senior Fiat official, Jing Boqing, flatly denied that the divorce will happen. “We are struggle to save the joint venture,” he said.

The joint venture, Nanjing Fiat, planned to bring three models to Chinese market: Bravo, Linea and Grand-Punto. However the importing plan has been frozen before it is implemented.

Fiat has been seeking to bolster its presence in Chinese market by imported more cars; however this plan was opposed by Nanjing Auto, saying that importing is not a profitable business.

In the first half this year, Najing Fiat sold 11,265 vehicles, down 30 percent from one year earlier. Its product portfolio includes Perla, Fiat Palio, Fiat Weekend and Fiat Siena. The joint venture had originally planned to sell 50,000 vehicles this year.

Najing Fiat was established in April 1999 by Nanjing Auto and Fiat. The total investment was 3 billion yuan, with each partner holding 50 percent stake.
source: Gasgoo.com
 

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from China Car Times:
The Chinese motoring press are reporting that the ill fated partnership between Nanjing motors and Fiat has run its course, and will be formerly seperating next month. This goes against the announcement earlier this year where Fiat and Nanjing decieded to step back from the brink and invest 3 billion RMB into their deal.

Since Fiat and Nanjing had a bust up, Fiat has been continually looking for a new joint venture partner and has since teamed up Zotye (Zotye will be producing the Lancia range of cars in China), and Chery to do make Fiat/Alfa Romeo automobiles in China.

Fiat seems determined to up its market presence in China, which currently is limited to a set of developing nation only cars when China Car Times believes Fiat should be offering the Punto, Multipla, Panda, Brava etc in China. Fiat did plan to import a range of cars, but according to our sources Nanjing was opposed to the plan saying it wasnt profitable (of course it isnt, the cars wouldnt be passing through Nanjing motors factories!)

The Fiat Nanjing Joint Venture was planning to sell 50,000 cars this year, however, in the first six months of ‘07, sales were a dismal 11,000 units.

Fiat and Nanjing originally poured 3 billion RMB into the joint venture in 1999, each party holds a 50% stake.

from Global Auto Sourcing:
To revive operations in China, Fiat names new executive and introduces new cars.
In order to turn around the previous sluggish performance in China, Fiat has named a new chief representative for business operations in China while planning to introduce three new car models early next year, Chinese newspaper Beijing News reported.

Paolo Arpellino, 45, will replace Andrew Humberstone to take charge of Fiat's business development and daily operations in China, effective on November 1 this year, Fiat Group China announced last Friday. Prior to this appointment, Fiat's joint venture with Nanjing Automobile Group has witnessed frequent personnel changes.

The three new car models to be introduced to Chinese market early next year include Grande Punto, Bravo and Linea. These car models are still under industrial certification and will be sold through Nanjing Fiat's sales networks, the Beijing News said.

"We sell new imported cars here to bolster the brand's presence in Chinese market; volume is not the main goal,” said Jing Boqing, business director of Nanjing Fiat. Jing added that currently the major task for the Nanjing Fiat is to exploit the potential of the existing products.

The joint venture Nanjing Fiat, is on the verge of a split as both Fiat and Nanjing Auto are seeking new alliances--Fiat is consolidating its partnership with Chery Automobile and SAIC while Nanjing Auto has just reached a deal with SAIC.

Fiat's CEO Sergio Marchionne told the Reuters in July that he insisted on the target to sell 300,000 vehicles in China by 2010, but Nanjing Fiat sold only 11,265 vehicles in the first half of this year, down 30 percent from one year earlier. The money-losing JV had originally forecasted to sell 50,000 vehicles for 2007. Marchionne complained that its Chinese partner was focusing too much on developing its own brand—MG.

Najing Fiat was established in April 1999 by Fiat and Nanjing Auto. The total investment was 3 billion Yuan, with each partner holding a 50 percent stake.
 

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NAC-FIAT partnership definitively over.
Italy's Fiat said it had pulled out of a money-losing Chinese joint venture partner Nanjing Automobile after the firm merged with bigger Chinese autos group SAIC Motor.

Fiat has been unhappy with Nanjing Auto's level of commitment to the venture, and raised the possibility of finding another partner to make passenger cars in China, the world's second biggest market.

The venture, known as NAC, had been losing money for years and selling far fewer cars than its competitors.

"The decision gives us total freedom of action to concentrate on the restructuring of our automotive business in China," Fiat CEO Sergio Marchionne said in a statement.

The combination of Nanjing and SAIC, long expected, follows government calls for the creation of a national champion to challenge foreign automakers in China.

SAIC has ventures with General Motors and with Germany's Volkswagen AG, making them the biggest sellers in the country with combined sales of 441,584 units or 14 percent of the market in the first half of the year.

Although Fiat's truck division, Iveco, has a van venture with Nanjing, and another one for trucks with SAIC, an Iveco executive has said a merger between the two Chinese partners would help simplify its relationship with them.

Collaboration in vans, parts

In a joint statement with Nanjing on Wednesday, Fiat said it would sell its 50 percent stake in the venture to Nanjing for an undisclosed amount. But it would keep working with Nanjing in making vans and parts.

"Although their collaboration in the passenger cars sector has come to an end, the long-standing cooperation between the two groups will continue," read the statement.

The venture's failure has raised doubts among analysts about Fiat's ability to meet its target of selling 300,000 units in China by 2010.

In 2006, it sold 31,300 cars, short of Fiat's target of 40,000 for the year and far below those enjoyed by SAIC and its U.S. and German partners.

Fiat's concerns grew when Nanjing began working on the relaunch of the MG sports car brand after buying it from Britain's failed MG Rover. It said Nanjing was being distracted from its commitments to the venture.

Meanwhile, another Chinese manufacturer, Chery Automobiles, has appeared as the likely successor to Nanjing as a partner for Fiat in the passenger car segment in China.

It is setting up a joint venture with Fiat to make 175,000 cars a year from 2009. It will make and distribute cars under the Fiat and Chery brands and introduce Fiat's Alfa Romeo premium sports car brand to China.

Another agreement has Chery supplying more than 100,000 engines to Fiat every year.
source: Reuters

Hot on the heels of Nanjing Auto's merger with SAIC, Fiat has announced it has pulled out of the automotive joint venture it had embarked upon with Nanjing.

The Sino-Italian operation had been a money-losing enterprise for years. Fiat says that Nanjing failed to live up to its commitments to the joint venture after the Chinese auto group took over MG Rover, and that the divorce will enable the Italian automaker to re-strategize its business in China. Fiat is expected to partner instead with Chery Automobiles, which just announced another joint venture with Israel Corp. Fiat and Chery are in the process of setting up another joint venture to produce 175,000 cars annually starting in 2009, and leading to the introduction of Fiat Group division Alfa Romeo to the Chinese market.

The separation affects only the cooperation between Fiat and Nanjing on the production of passenger cars, and doesn't have any bearing on Fiat's truck-building division, Iveco, which cooperates with Nanjing to build vans and with Nanjing's new parent company SAIC on trucks, the two relationships will continue unhindered.
source: Autoblog
 

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Nanjing will continue to produce Fiat models under its own badge.

Fiat and Nanjing may have divorced their marriage on passenger cars, but that shouldn't affect their offspring. Following Fiat's withdrawal from its joint venture with the Chinese automaker, production of three current Fiat models at the Nanjing plant is expected to continue.

With demand for the Sino-Italian cars slowly dwindling, Nanjing Fiat Auto was expected to continue production in the short term only to satisfy orders placed, and the manufacturing of spare parts to support the service of the cars already sold will also continue for years to come. However, recent reports indicate that as part of its divorce with Fiat, Nanjing acquired the rights to continue building the Palio Weekend wagon, Siena sedan and Perla (a larger sedan having been developed in China and based on the Siena platform) under a different badge. Component suppliers in China report that they have received no cancellation on shipments to the assembly plant, so they're expecting to continue on with business as usual.
source: Autoblog
 

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Volks can acquire plant of the Fiat in China

Volks can acquire plant of the Fiat in China

The subsidiary Chinese of the German assembly plant Volkswagen, located in Xangai, informed that she considers the possibility to acquire the plant of production of the Fiat in the east of China, to stimulate its capacity of production in the Asian giant. The Shanghai Volkswagen is an enterprise in set with the main Chinese assembly plant, the Motor SAIC. In accordance with Kai Grueber, spokesman of the Volkswagen in China, the necessary company to increase its capacity of production to follow the strong demand in the country. "It has some options. Nanjing could be one of them ", said Grueber, mentioning itself it plant located in the Chinese east that the Fiat agreed to vender for the SAIC. However, the assembly plant still did not sign no document that confirmed venda. The plant of the Fiat has a capacity of annual production of 60 a thousand vehicles per year, but it could be raised for 100 a thousand up to 2010. Already the Shanghai Volkswagen has a capacity of annual production of 500 a thousand units. The Volkswagen, that also made an alliance with the FAW Group in the north of China, vendeu 268,200 vehicles in Hong Kong, Macau and in China in the first trimester of 2008, registering an increase in vendas of 32,5% in relation to the same period of the previous year.

Source: Investnews.
 

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SAIC acquires Nanjing Auto and its Fiat venture.

April 9, 2008 - With the assets transfer registered with the industrial and commercial authorities, the acquiring of Nanjing Auto by larger rival Shanghai Automotive Industry Corp. (SAIC) was completed on April 8, just three months after the two companies signed a merger agreement to create the largest automaker in China.

After buying out 100% of the holdings of Nanjing Auto in early April, SAIC announced plans to invest $1.2 billion to integrate and further develop the smaller company, a partner of Italian carmaker Fiat. The investment by SAIC includes the consolidation of product development, engineering and manufacturing operations.

SAIC has a plan to boost the annual production capacity of its Nanjing facilities (or Nanjing Auto) to 500,000 units by 2012. The Shanghai auto-making giant will help Nanjing further develop the MG range of sporty vehicles, especially for export markets, while some of the companies' shared resources will be earmarked for further development of the domestic Roewe product series.

The merger remains a work underway. Later this year, Nanjing will launch a revised MG7 sedan, equipped with SAIC's 1.8-liter four-cylinder engine. It will also start production of the MG3, a smaller hatchback to compete with compact crossover vehicles, and the mid-size MG5 sedan in 2009.

Nanjing Auto terminated its venture with Fiat in December, when SAIC, a partner of Volkswagen, agreed to buy all of Nanjing Auto's auto-making assets, including its Fiat venture that has an annual capacity of 60,000 vehicles.

SAIC aims to build nearly 2.0 million vehicles in 2008, including joint-venture models developed with partners Volkswagen and General Motors.
source: Gasgoo.com
 

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Volkwagen to take over former Fiat plant in China.

Volkswagen's China operation has signed an agreement to buy a plant formerly run by a joint venture of Italy's Fiat in the country's east, the German auto giant's local partner said Wednesday.

"After completing the (asset) appraisal of Nanjing Fiat, Shanghai Volkswagen has signed an asset take-over agreement and will formally set up its Nanjing production base in the near term," said a statement by SAIC Motor.

It did not disclose any financial details about the deal.

But the 21st Century Business Herald newspaper reported Wednesday that the take-over price would reach around 1.5 billion yuan (215 million dollars).

Nanjing Fiat was a joint venture between Fiat and China's Nanjing Auto. The two companies terminated cooperation after SAIC bought Nanjing Auto in the biggest-ever tie-up between Chinese vehicle makers in December 2007.

"The utilisation of Nanjing Fiat's capacity has long been insufficient while Shanghai Volkswagen has been facing capacity bottlenecks due to booming sales and the lack of a new production base," the statement said.

Shanghai Volkswagen, a 50-50 joint venture between SAIC and Volkswagen, expects the new base to start production in the middle of this year, with output to reach 60,000 units this year and 100,000 in 2010, it added.
source: AFP
 
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