Fiat has announced that it will be producing its famed Alfa Romeo brand for the Chinese market in partnership with Guangzhou Automobile Group Co Ltd. The joint venture was also announced by Zeng Qinghong, the president of the Chinese automotive group. The joint manufacturing effort will be called Guangqi Fiat and is scheduled to start production in July, 2012.
The venture will begin by producing Fiats, but Qinghong said, “Besides the Fiat brand, after talks between the two shareholders, we will introduce the Alfa Romeo brand to the venture company.” His comments were given during the Guangzhou auto show. The partners are still discussing a timetable for the production and sale of Alfa Romeos in China.
Guangqi Fiat will have an initial capacity of 140,000 units. The joint venture was developed with the intent of offering multiple auto brands and an array of products being manufactured at any one time. Chrysler Group, currently managed by Fiat, has openly said that it was going to aggressively seek a means to build more vehicles in China. The Guangqi Fiat organization could be a convenient venue for them to do so.
The Chinese auto market is seen to be the largest under served venue in the world at this time. The problem that Alfa Romeo will face is that it will be a johnny-come-lately to the luxury segment of that market. Audi, Mercedes-Benz, and BMW have already established themselves and growth in the luxury segment has been slowing. Fiat and Chrysler may have success with their smaller family cars, but it could be a struggle for Alfa.