Nanjing will still build Fiat cars – sources
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Nanjing Fiat produces three small cars: the Palio Weekend, Siena and Perla (pictured). |
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Nanjing purchased Fiat’s share in the struggling joint venture for an undisclosed sum.
Three suppliers to the former joint venture, Nanjing Fiat Auto, confirmed last week that they have not received notification to cease shipping parts to the assembly plant.
Asked whether his company will send the usual quota of parts to Nanjing Fiat next month, a supplier executive said: “I suppose so.” An executive at another supplier confirmed his company will definitely continue supplying the same quantity of parts next month. The executives requested anonymity.
Nanjing Fiat produces three small cars: the Palio Weekend, Siena and Perla. Data from consultant Automotive Resources Asia shows Nanjing Fiat sold 15,219 vehicles in the first 11 months of 2007, compared to 28,167 in the same time period in 2006, a drop of 46 percent.
Nanjing will continue to use the Nanjing Fiat supplier base to provide parts for a new range of cars under its own brand. Industry sources say Fiat is expected to sell rights to Nanjing Auto to manufacture the Palio and Siena in China. In response, Fiat Group China spokesperson Zhen Xiaoli says: “No comment.”
A senior Nanjing Auto executive who asked not to be named says: “Fiat does not want to sell the brand.” He says Nanjing Auto will cease production of the Palio, Siena and Perla “after several months.”
He says Nanjing Auto will continue to produce the three cars in the short term to meet “small orders from dealers.”
“In the future we will not [produce the Fiat cars]. In this period we will produce [as there are] small orders from dealers.”
“After several months, the after sales and spare parts business will be transferred to Fiat group. After we transfer business to Fiat group in China, we will stop. Now is a special period. Now is a transition period.”
“The Fiat Palio and Siena are not Fiat’s focus in China anymore. Fiat is concentrating on larger cars,” says a supplier executive. He says that he expects Nanjing Auto will continue to produce and sell the Palio, Siena and Perla without the Fiat names and logo.
A similar strategy was used at FAW Haima Automobile Co., when Mazda retreated from the joint venture. Haima has a Mazda supplier base for its own brand of Mazda-based Haima vehicles.
The Nanjing executive says the amount Nanjing Auto paid for Fiat’s share of the joint venture was decided via a “shareholder negotiation.” He declined to state the amount.
Asked whether Nanjing will continue to make small cars, similar to the cars made in the Nanjing Fiat joint venture thereby continuing to use the same supplier base, the Nanjing Auto executive says: “Now NAC has joined SAIC. SAIC will make the product plant. They will make a big new plan. Now [it’s all] in their hands.”
The Nanjing Auto executive maintains that his job and those of many colleagues will continue as per normal under the new venture.
You may e-mail Namrita Chow at autonews@crain.com
You can reach Namrita Chow at autonews@crain.com.
