Fiat Plans to Build a Second Facility in China image

As Fiat cut its investments in the troubled Europe, it announced its plans to build a second plant in China, the world’s largest auto market.

“In the future, we might have another manufacturing site, somewhere in the south,” said Jack Cheng, general manager of Fiat’s joint venture in China with Guangzhou Automobile Group.

Sergio Marchionne, Fiat’s Chief Executive Officer, plans to boost sales in China to make up for the loss in Europe, where the automaker is reducing investments and spending this year by 500 million euro ($645 million), as the auto market here is expected to fall for the 5th straight year. During the first half of 2012 Fiat lost 354 million euro in Europe.

Fiat had two failed partnerships in China, but he finally managed to make a JV with Guangzhou Automobile Group, and begin selling its first vehicle made in China, the Viaggio compact, which will hit the market on September 16th. Fiat also plans to introduce a new model in 2013 and a SUV in 2014.

Viaggio’s price will begin at 108,800 yuan ($17,188), and the JV’s plant can manufacture up to 140,000 units annually. Fiat already sells three imported models in China: the Freemont SUV, the Bravo hatchback and the retro-styled 500 subcompact.