Fiat Auto and Iveco are boosting local output to satisfy demand in the booming Chinese new-vehicle market.
Fiat sold 23,020 passenger cars last year when it launched several new products in China. This year, Fiat expects to more than double that to 50,000 to 60,000 units. And it will boost output.
Fiat's truck-making subsidiary, Iveco, will broaden its range of Chinese-built trucks to fully use its installed capacity of 40,000 units annually. It has built the Daily, a light commercial minibus, in China since 1996 and sold 15,000 units last year.
Fiat entered China in 1999 by creating Nanjing Fiat, a 50-50 joint venture with Yuejin Automotive Group. Fiat helped the Chinese company to prepare two derivatives of the old-generation Seat Ibiza for introduction as the Encore and the Unique. In March 2002, Nanjing Fiat started local production of the Fiat Palio hatchback. The Fiat Siena long-wheelbase sedan followed in September. A third member of the 178 world car family, the Weekend station wagon, goes on sale in June.
Fiat Auto China chief Flavio Ciappa said capacity at the Nanjing plant would rise from 60,000 to 120,000 units by mid-year and possibly to 200,000 by the start of 2004.
"Currently, we've got a bottleneck at our paint shop, but I think we can reach a 120,000 capacity by June," he said. "For the second step, we'll have to see."
Ciappa said Fiat will sell 150,000 cars in China within two years.
"We want to be the protagonists in the market and you can't do that with only the Palio and Siena. We have to move into higher-end products," he said, but declined further comment.
Iveco licensed Yuejin Automotive Group to assemble the Daily mini-bus in China. In 1996 the two companies launched a 50-50 joint venture called Naveco.
Iveco sales this year will be flat because "we are at the end of the life of these vehicles" and won't have new models until late in the year, said Jean Marc Boucher, vice general manager for dealers and marketing.
Iveco has focused on high-end, 20-seat light buses for distances of less than 300km. But China's growing highway network is creating demand for 30-seat medium-size buses.
Boucher plans to double Iveco sales in two years to 30,000 units, focusing on commercial vehicles and special vehicles - fire engines, ambulances and military trucks.