Chery Auto has denied a report in an Italian newspaper that it is in talks with Fiat to buy a factory in Sicily.

Dow Jones reported that Chery spokesman Jin Yibo denied the report in La Repubblica which says the Chinese automaker might buy the plant.

Other reports in China suggest that Chery is planning to build a car plant in Turkey, which could ship cars tariff free into the EU because of Turkey's customs union agreement with the EU.

The Fiat plant in Sicily could become available to a buyer as Fiat plans to finish car production at the Termini Imerese plant in Sicily by 2011, a decision that Fiat CEO Sergio Marchionne recently confirmed.