China's biggest automobile industry group Shanghai Automotive Industry Corp (SAIC) has signed a merger contract with Nanjing Automobile (Group) Corp at Diaoyutai State Guest House in Beijing.

Under this contract, SAIC will acquire all assets owned by Nanjing Auto, including OEM and component parts manufacturing facilities. In return, Nanjing Auto will acquire no more than 8 percent of SAIC's stakes after the merger, an insider familiar with the talks said.

By the end of 2008, Nanjing Auto's assets, about RMB 2 billion (USD 272 million) will be injected into SAIC Group.

The two parties will jointly develop MG and Roewe brands based on Rover technology following the merger. The two companies currently are sharing the same technology, derived from the now-defunct British carmaker MG Rover.

Italy's Fiat said it had pulled out of a money-losing Chinese joint venture partner Nanjing Automobile after the firm merged with bigger Chinese autos group SAIC Motor.

Fiat has been unhappy with Nanjing Auto's level of commitment to the venture, and raised the possibility of finding another partner to make passenger cars in China, the world's second biggest market.

The venture, known as NAC, had been losing money for years and selling far fewer cars than its competitors.

"The decision gives us total freedom of action to concentrate on the restructuring of our automotive business in China," Fiat CEO Sergio Marchionne said in a statement.

The combination of Nanjing and SAIC, long expected, follows government calls for the creation of a national champion to challenge foreign automakers in China.

SAIC has ventures with General Motors and with Germany's Volkswagen AG, making them the biggest sellers in the country with combined sales of 441,584 units or 14 percent of the market in the first half of the year.

Although Fiat's truck division, Iveco, has a van venture with Nanjing, and another one for trucks with SAIC, an Iveco executive has said a merger between the two Chinese partners would help simplify its relationship with them.

Collaboration in vans, parts

In a joint statement with Nanjing on Wednesday, Fiat said it would sell its 50 percent stake in the venture to Nanjing for an undisclosed amount. But it would keep working with Nanjing in making vans and parts.

"Although their collaboration in the passenger cars sector has come to an end, the long-standing cooperation between the two groups will continue," read the statement.

The venture's failure has raised doubts among analysts about Fiat's ability to meet its target of selling 300,000 units in China by 2010.

In 2006, it sold 31,300 cars, short of Fiat's target of 40,000 for the year and far below those enjoyed by SAIC and its U.S. and German partners.

Fiat's concerns grew when Nanjing began working on the relaunch of the MG sports car brand after buying it from Britain's failed MG Rover. It said Nanjing was being distracted from its commitments to the venture.

Meanwhile, another Chinese manufacturer, Chery Automobiles, has appeared as the likely successor to Nanjing as a partner for Fiat in the passenger car segment in China.

It is setting up a joint venture with Fiat to make 175,000 cars a year from 2009. It will make and distribute cars under the Fiat and Chery brands and introduce Fiat's Alfa Romeo premium sports car brand to China.

Another agreement has Chery supplying more than 100,000 engines to Fiat every year.

Chery Automobile of China has announced that it will enter into a joint venture with Israel Corp. — an Israeli holding company — to create a new automaker. Israel Corp. currently has holdings in chemicals and shipping. The joint venture — which nearly took a year for approval — will see Israel Corp. taking a 45% stake, which cost the investment company $225 million.

According to The Detroit News, Chery has production agreements with partners in Iran, Malaysia, Bangladesh and Argentina. Chery will also produce small cars for Chrysler.

No word on when the new brand will launch.

FAW held a ceremony of super heavy-duty truck J6 in workshop on July 15, 2007. Huaren Sheng, who is the member of NPC Standing Committee, Ming Wang, who is the secretary of Jilin province, attending the ceremonoy.

　　As a heavy-duty truck that faces to the Chinese future market, J6 is one of the truck masterpieces that merged much high-tech. The product has the unique quality in the field of safety, comfort, economy, reliability and environmental protection. The power system of J6 is equipped with CA6DM1 engine, which is independently developed by R&D Center of FAW. The max power of the 12.5L engine is 460 hp. At present the engine can meet emission standard of Euro-III, and it is capable of meeting Euro-IV in the future. More than 300 terms independent innovation and 197 patents were used during the R&D process.

　　J6 is one kind of truck using many high-tech achievements. Moreover, it has suitability in the aspect of laws, and keeps the same pace with world advanced heavy-duty trucks. J6 can fully satisfy the requirement of the national related laws and regulations that issued at present and next five years, president Yanfeng Zhu pointed out.

　　J6 is the latest developed product from FAW, which already reaches international advanced level. As a new generation of Jiefang heavy-duty truck, J6 undertakes a significant historical mission; it not only leads the development of our country’s high-end heavy-duty trucks in the future, but also utmostly needs to meet the customer’s future demands.

martin_krpan je napisal/-a:Zanimivo, v obdobju ko vsi veliki avto proizvajalci rinejo na Kitajsko, tam gradijo tovarne in sklepajo partnerstva ter celo konstruirajo avtomobile posebej za ta trg, se je FIAT odločil prekiniti sodelovanje z NAC in prenehati proizvodnjo svojih vozil (Palio, Siena, Perla in Doblo) na Kitajskem. Razlog so slabi prodajni rezultati in negativne številke. Podjetji bosta še vedno sodelovali pri proizvodnji gospodarskih vozil.

Chery Automobile will definitely establish partnership with Italian automaker Fiat Group to build a passenger vehicle joint venture in China in 2008, an official from Chery Automobile confirmed recently.

Besides establishing the joint venture, Chery and Fiat also plan to locally produce Fiat Linea, Bravo and Grand Punto after they are imported to Chinese market, according to Jin Gebo, the director of Chery's administrative office.

This August, Fiat and Chery have signed a memorandum of understanding to establish a 50:50 passenger car joint venture and an engine supply contract, but there are no further negotiation reported until very recently, when Fiat announced to pull out of Nanjing Automobile.

Fiat's venture with Nanjing Automobile had been losing money for years; and China's SAIC has achieved a long expected acquisition of Nanjing Auto to follow government calls for the creation of a national champion to challenge foreign automakers in China.

"Fiat aims to boost China sales to 263,000 cars a year by 2010 from 32,000 units in 2006, and will introduce a slew of new models into the country in coming years," Fiat CEO Sergio Marchionne said in a statement.