Fiat is eyeing a possible joint venture with Guangzhou Automobile Industry Group (GAIG), according to Chinese sources.

A joint venture with Fiat was a very realistic hypothesis, GAIG chief executive Zeng Qinghong said, according to Italy’s Il Sole 24 Ore newspaper.

Fiat needs to agree a joint venture to build its Linea , Bravo and Grande Punto models in Canton.

The report noted that GAIG had not developed its own brand yet after deciding to launch its own passenger car line two years ago when it began searching for a technology partner which would help develop the vehicle from scratch.

As early as in 2007 GAIG had signed a technological cooperation accord with Fiat Powertrain Technologies.

Fiat, whose foray into China has stalled somewhat, was last week reported to have postponed plans to begin building cars with Chery Automobile after signing an agreement for a 50-50 joint venture in August 2007 which would see it build 175,000 Fiat, Alfa Romeo and Chery cars a year.

No new timetable was announced.