Fiat Starts Building Car Plant in China

Fiat yesterday made the first major step towards the brand's comeback in China - it started construction of a production facility that will support the company's expansion in the country through the launch of several models. The plant, which will belong to both Guangzhou Automobile Industry Group and Italy's Fiat required an investment of $733 million and is located in Changsha, capital of Hunan province in central China.

The Shanghai Daily informs that the plant will have a production goal of 140,000 vehicles and 220,000 engines per year but figures might be then increased if everything goes according to the plan.

The first model to be launched in the continuously-growing Chinese market is the Linea sedan. The factory is projected to begin operations in 2011, with sales of the Linea likely to start soon after that.

Nevertheless, auto analysts believe that Fiat has to do more than setting up a new plant in China. The rapidly expanding market demands Fiat to establish a large network dealership and try to step into more market segments beside the small car sector as competition is getting fiercer every month.

"It would be impossible for Fiat to rapidly achieve a large market share merely depending on its small cars, where the segment is highly competitive," said Wang Liusheng, an auto analyst from Merchants Securities Co., according to the aforementioned source. "The reborn of Fiat in China will also involve brand-building and setting up dealerships."

Separately, Guangzhou Automobile hopes the partnership will support its expansion as well as it intends to use Fiat technology in its very own models.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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