At 19:58 on July 6th, Beijing time, Fiat Group Co., Ltd. (Fiat) and Guangzhou Auto Group Co., Ltd. (referred to as GAC) signed a basic agreement for the formation of a joint venture in China. The ratio of the two companies is 50:50. The company will produce cars and engines in China.
At 20:05 on July 6, the China Economic Times received an official announcement from Fiat China Business Co., Ltd., saying that the signing of the agreement was supported by high-level Sino-Italian support, in the presence of Chinese President Hu Jintao and Italian Prime Minister Silvio Berlusconi. Witnessed the signing of the agreement between Fiat’s chief executive Malccione and Guangzhou Automobile’s chairman Zhang Fangyou in Rome, Italy.
According to the agreement, the joint venture will be registered and constructed in Changsha, Hunan. The new factory will have a production site area of ​​over 700,000 square meters and a total investment of more than 400 million euros.
According to the announcement, the first phase of the joint venture will have an annual production capacity of 140,000 cars and 220,000 engines. After that, the production capacity will gradually increase to an annual output of 250,000 cars and 300,000 engines.
The new plant of the joint venture company will start construction in August this year and is expected to start production in the second half of 2011.
GAC revealed that the first model to be launched by the joint venture company will be the mid-size sedan Linea, the first Fire 1.4-liter (120-hp and 150-hp T-Jet) turbine with the “FPT Fiat Power Technology†engine. Supercharged gasoline engine.
According to previous news, the joint venture company plans to settle in Panyu District, Guangzhou, but now it has become Changsha County, Changsha County, Xingsha Town.
The change of location is related to the cooperation between GAC and Changfeng.
On May 21 this year, Guangzhou Automobile purchased a 29% share of Changfeng Motor, a company owned by Hunan Changfeng Group, for one billion yuan. Guangqi became the company's largest shareholder, and Changfeng Automobile was renamed GAC Changfeng Motor Co., Ltd. The establishment of GAC Fiat in Changsha is an important prerequisite for GAC and Changfeng to reach a cooperation agreement.
There are very mature parts and components supporting bases around Guangzhou. By comparison, the matching capacity of Hunan Changsha is weaker. Will this form a “dragging†for GAC Fiat? According to relevant news, the localization rate of Link Ya will reach more than 70%. Will Fiat further establish a component support factory in Changsha? The reporter called Zeng Qinghong, vice chairman of GAC, on the matter, but as of press time, he was unable to get a response.
On December 26, 2007, the Nanjing Fiat Joint Venture Company was disbanded. During the eight years of cooperation with Nanjing Automobile (which has been merged with SAIC), the cumulative loss of the Nanjing Automobile Fiat project reached 2.22 billion yuan. Currently, with the exception of Nanjing Iveco and Chongqing Hongyan Iveco's two commercial vehicle projects, Fiat has almost completely withdrawn from the Chinese passenger car market. This time, a joint venture with GAC was established to allow Fiat passenger vehicles to return to the Chinese market.
Also on July 6, GM’s asset sale program was approved by the US Bankruptcy Court, and on this day, Fiat’s new joint venture company was born in China. The fastest-growing Chinese market in the world cannot be ignored. Learning from the lessons of the last time is really important for Fiat in the Chinese market. Malchone wants to realize the dream of its 7 million automobile giants. The Chinese market is a test. No car company can fail twice in China.
Of course, compared with Nanjing Automobile, GAC has a great advantage. In 2008, Guangzhou Automobile sold 530,000 vehicles and achieved a sales income of 109.9 billion yuan. The comprehensive index of industrial economic efficiency ranks first in 19 key enterprises and groups in the country for six consecutive years. According to an audit by PricewaterhouseCoopers Zhong Tian CPAs, as of the end of 2008, GAC Group’s total assets were 23.3 billion yuan, total liabilities were only 4.5 billion yuan, and shareholders’ equity was as high as 18.8 billion yuan.
In addition, the Fiat is known as the "king of the world's cars," its technical strength and design standards are among the world's leading level, if you take the "power" of China's energy-saving, emission reduction, to avoid previous positioning in the Chinese market, management confusion , Inefficiency, and the slow cycle time of new cars, rapidly launching innovative high-quality cars and mid-level cars with higher technical content, coupled with low-price strategies, and using GAC's advanced marketing network for rapid expansion, this time returning to China. In the market, Fiat may be eye-catching.
View related topics: China's auto industry recommence mergers and acquisitions wave
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