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Fiat and Chery announce deal to produce Alfa Romeo and Fiat autos for China

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MILAN, Italy (AP) _ Italian automaker Fiat Group Automobiles announced a joint venture Tuesday with Chery Automobiles of China to produce Alfa Romeo and Fiat brand cars for the Chinese market.

The deal comes just a day after Fiat announced it will buy engines from Chery as the Turin-based automaker expands its ties in a country viewed both as a lucrative and fast-growing market as well as a low-cost base for production.

The deals appear to mark a strategy shift for Fiat, after Fiat SpA Chief Executive Sergio Marchionne said another Chinese partner, Nanjing Automobile, had fallen short on its pledged investment.

Fiat and Chery said they intend to produce 175,000 Fiat and Alfa Romeo brand autos beginning in 2009. That's on top of the deal for Chery to supply 100,000 1.6- and 1.8 -litre engines a year for use in cars manufactured by Fiat in China and abroad. No financial terms were given.

``The introduction of Alfa Romeo in China represents an historical step, launching one of the most attractive brands of the European car industry into the world's fastest-growing automotive market,'' Marchionne said in a statement.

He said the move is part of a greater strategy to expand Alfa Romeo worldwide.

Fiat SpA, of which Fiat Group Autos is a subsidiary, currently has six joint ventures and nine wholly foreign owned enterprises in China that manufacture and distribute cars, commercial vehicles, agricultural and construction equipment and auto components, the company said.

Chery, based in the eastern city of Wuhu, currently sells 10 models under its names and is one of China's largest car exporters.

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Fiat and Chery announce deal to produce Alfa Romeo and Fiat autos for China
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