Manufacturing News

Fiat Chrysler explores China venture with BAIC, report says

Fiat Chrysler Automobiles and BAIC Group are exploring a joint venture, which would be FCA's second partnership in China after its tie-up with Guangzhou Automobile Group, people familiar with the matter told Bloomberg.

The discussions are at an early stage, said the people, who asked not be identified because the talks are private.

FCA formed its first production venture in the country in 2010 with Guangzhou Auto to produce Fiat brand vehicles. Last year, the venture was expanded to manufacture the Jeep Cherokee at its plant in Hunan province's Changsha city. Production of the Jeep Renegade was added this year.

China requires foreign automakers to set up joint ventures with local partners to manufacture locally and avoid hefty import taxes. Each international carmaker is limited to two passenger-vehicle joint ventures, with no limit on the number that the local partner can have.

For FCA Group, a second joint venture would allow it to broaden its offerings of China-produced models beyond the Jeep and Fiat brands. BAIC produces Hyundai and Mercedes-Benz vehicles for sale in China.

"China is and will continue to be a key market for Fiat Chrysler Automobiles," the company wrote in an email. "As one of our most important markets, it is our wish to continuously grow our business in China. In an effort to achieve this goal, FCA will investigate potential new projects as part of our ongoing business."

BAIC declined to comment. reported this week the talks between BAIC and FCA Group.

Total vehicle sales of the GAC Fiat Chrysler venture almost quadrupled to 75,834 in the first seven months compared with the same period a year earlier, according to the China Association of Automobile Manufacturers.

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