SAIC, Fiat team up on trucks, diesel engines

PUBLISHED : Tuesday, 25 July, 2006, 12:00am
UPDATED : Tuesday, 25 July, 2006, 12:00am


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Shanghai Auto Industry Corp, China's biggest carmaker, will team up with Fiat of Italy to make heavy-duty trucks and diesel engines on the mainland.

SAIC, Fiat and Chongqing Heavy Vehicle Group will set up SAIC Iveco Commercial Vehicle Investment with an investment of Euro120 million ($1.17 billion), Fiat said, adding that its subsidiary Iveco would contribute Euro40 million.

The venture will increase truck production at Chongqing Hongyan Automotive, a subsidiary of Chongqing Heavy Vehicle, from 15,000 units to 40,000.

The plant would assemble vehicles based on Iveco's Stralis heavy lorry with improvements aimed at the Chinese market and develop products with a better mix of technology and local and European components, Fiat said.

It also said that Iveco and Fiat Powertrain Technologies had signed a joint venture agreement with SAIC to manufacture three types of medium and heavy diesel engines.

Officials at SAIC and Chongqing Heavy Vehicle declined to comment.

Fiat is one of the weakest of the global carmakers in China, with its passenger car venture with Nanjing Automobile Group producing fewer than 30,000 vehicles a year.

'Iveco considers China a priority,' said Iveco chief executive Paolo Monferino. 'This agreement is part of a broad plan for Iveco's development in China. The agreement [on diesel engines] will allow us to upscale our activities in China from a profitable niche market to significant volumes.'

Mainland vehicle sales rose 54 per cent to 1.25 million units in the period, according to the China Association of Automobile Manufacturers.

'Iveco is committed to the development of industrial and commercial activities in China with the objective of offering the local market a complete range of products which are competitive in terms of quality and price,' the firm said.