Fiat and Chinese Carmaker Form Alliance

The Fiat Group announced a 50-50 joint venture on Monday with the Guangzhou Automobile Group to make cars and engines for the Chinese market, the latest move by the Italian automaker to expand outside its home market.

The companies said they would build a 173-acre plant in Changsha, in Hunan Province, at a cost of more than 400 million euros, ($556 million), with production set to begin by the end of 2011.Upon completion of the first phase of development, the venture will have the capacity to make 140,000 cars and 220,000 engines a year. The companies said capacity at the plant, which will make fuel-efficient, low-emission vehicles, could eventually be increased to 250,000 cars and 300,000 engines a year.

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