Fiat and Guangzhou Automobile Industry Group (GAIG) have signed an agreement to jointly produce passenger cars in Guangzhou province, according to Chinese sources.
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The joint venture is subject to government approval and is thought to require an initial investment of US$650m. Earlier reports suggested that Fiat wanted to assemble its Linea, Bravo and Punto passenger car models in Canton province.
Separately GAIG, which already has passenger car joint ventures with Toyota and Honda, last week signed an agreement to acquire a 29% stake in Hunan Changfeng Motor from the Hunan regional government for RMB1.05bn.
The acquisition will make GAIG the largest single shareholder in the Chinese SUV manufacturer. Under the agreement, GAIG will invest RMB10bn over the next five years to increase the joint venture’s capacity to 500,000 vehicles per year.
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