Fiat is set to manufacture Alfa Romeo models in China through a new partnership with Chinese carmaker Chery Automotive, Fiat CEO Sergio Marchionne has been quoted today as saying. The bombshell news came in comments attributed to the Fiat CEO during a management awards ceremony and they have been widely reported by both ANSA and Finanza & Mercati today.

Fiat is urgently seeking to make up lost ground in the Chinese market, a situation created by its sluggishly proceeding partnership with Nanjing Auto, and last year it signed a new agreement with its domestic rival Chery Automotive to supply engines to Fiat. The rapidly rising demand for prestige category cars in China make the idea of assembling Alfa Romeo models in this exploding new car market very rosy. "The idea is good and we will do it," said a very affirmative Marchionne today, "but first we have to be sure the Chery plant produces real Alfas and this requires a great commitment on our side both in terms of quality and engineering. We want to make sure the product is right, but this will not take much time.

'The alliance with Chery started from engines, but we aim at developing a partnership for the Alfa brand," continued Marchionne. "It is impossible that other brands be produced in the Nanjing structure,' he added. Nanjing Fiat, a 50-50 joint venture between Fiat Group Automobiles and Chinese carmaker Nanjing Auto came on stream at the beginning of this century, but with only 30,000 vehicles assembled last year the partnership has drifted. Marchionne has been openly unhappy in recent months with Nanjing Auto's purchase of the manufacturing assets of defunct UK carmaker MG-Rover and its current concentration on re-launching this brand.
 

Chinese newspaper reports, attributed to regional government sources, recently suggested that Chery could acquire part or all of Fiat's 50 percent stake in Nanjing Fiat. Meanwhile, the relationship with Chery, inaugurated late last year, which will see Fiat purchasing 100,000 1.6- and 1.8-litre engines from its new ACTECO family, and Chery seems to hold more upside for Fiat. However Marchionne is busy spreading his options, being reported as saying that: "Chery is not the only Chinese company with which we have relations. Today, Fiat is in the position of choosing with whom it wants to develop cars in China, something that two years ago we could not do."

There are no suggestions at what models Alfa Romeo will consider building in China if this ambitious project gets the go-ahead, but the Alfa 159 sedan must be a favourite, with its German rivals from BMW and Audi already in a position to meet strong demand in this segment from the local market. Fiat also wants to build the Grande Punto in China so the forthcoming small Alfa Romeo coupé, dubbed the "Junior" must also be an option as it will be built on the Grande Punto architecture, providing strong component and engine sharing opportunities.