Fiat takes another shot at China’s market

[rickaren]

Fiat takes another shot at China’s market

Posted Monday, Aug 17, 2009, 1:13 pm in Employee News

After striking out with local partners in China on two previous occasions, Fiat SpA faces what might be its last chance to expand into one of the few markets still seeing red-hot growth despite the effects of the economic downturn, the Wall Street Journal Europe reported.

The Italian company is busy setting up a $570 million joint venture with Guangzhou Automobile Group Co., its latest attempt to make inroads in a country that last month saw sales soar by more than 60 percent from a year earlier, the paper said. Despite fierce competition, China’s market is proving irresistible for Fiat as well as other car makers. Growth rates far exceed anything other markets can offer, despite the effects of the latest slump, and China looks set to surpass the U.S. to become the world’s biggest auto market as early as this year, the Journal said.

Fiat has so far had a hard time finding the right local partner to help it take advantage of the opportunities offered by the market, IHS Global Insight analyst John Zeng told the paper. With its first partner, Nanjing Automobile Corp., Fiat couldn’t agree on a licensing fee for its technology, Zeng said. Reaching out to another possible partner, Chery Automobile Co., Fiat found that the companies’ respective models would be in direct competition with each other, the paper said. As a result, Fiat was forced to drop a target it set three years ago to sell 300,000 cars in China by 2010, the story said. (Wall Street Journal Europe)