Fiat Auto and Chery Automobiles have signed a memorandum of understanding which should lead to the Chinese automaker supplying 1.6- and 1.8-litre petrol engines for Fiat cars built both in and outside China.
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The two companies expect an annual supply of over 100,000 engines and hope to sign the definitive deal before the end of this year.
In a statement, Fiat Auto Sergio Marchionne said: “The agreement with Chery will give us the opportunity to further increase the competitiveness of our product range on the international markets. Chery is a young and modern company with a solid technical background and I am glad to welcome this further step in our strategy of targeted alliances.
“In the relation with Chery we see the potential for a wider co-operation both in powertrains and, eventually, in other automotive sectors.”
The news comes a little over a year after Fiat and GM Europe dissolved their five-year-old joint powertrain venture that had developed a line of petrol and diesel engines still used in both companies’ models.
