Zheng Xiancong: Fiat and Chrysler may integrate brands in China

As Fiat Auto becomes the largest shareholder of Chrysler, the synergy between the two parties will increase the confidence for Fiat to return to China.

Yesterday, Zheng Xiancun, general manager of Fiat’s joint venture in China—GAC Fiat Auto Co., Ltd. disclosed that due to the joint procurement of Fiat and Chrysler in China, the procurement cost is 30% to 40% lower than that of foreign countries, and much lower than other domestic joint ventures. This will ensure that the first mid-size car, C-Medium, of GAC Fiat, which is listed in the middle of next year, will have "competitiveness" in pricing. Zheng Xiancong disclosed the above information at a press conference at the "Fiata 500 debut at the Ferrari Asia Pacific Challenge."

For the news that Chrysler’s models will produce and hang Fiat logos at GAC Fiat, Zheng Xiancong did not give a positive answer, but said that the integration of Fiat and Chrysler will take place within a month or two. In the future, the Chrysler models imported from the United States in Europe. The flag of Lancia, which is owned by Fiat, may be sold. In the United States, Fiat's products may also be sold under the symbol of Chrysler. "This integration may also happen in China in the future," he said.

Prior to these comments, Zheng Xiancong said that on July 21, US local time, Fiat bought shares of Chrysler held by the U.S. and Canadian governments to achieve absolute control of the U.S. automaker. After the completion of the transaction, Fiat’s Chrysler shares increased from 46% to 53.5%, and the US government sold the last 6% of Chrysler’s shares, ending investment in the automaker six years ahead of schedule.

Domestic news has not yet been confirmed, but the integration of both parties in China has already begun. Zheng Xiancong revealed that Fiat and Chrysler have already implemented joint procurement of spare parts in China. The annual purchase amount exceeds 1 billion euros, and large-scale purchases have reduced costs for domestic use. According to reports, C-Medium's localization rate will reach 70%. "China's current production of spare parts has been very high." Zheng Xiancong said. According to the plan, GAC Fiat's first car, C-Medium, is expected to be listed next year.

As for the recent slowdown in the domestic auto market, Zheng Xiancong said that the annual sales volume of the mid-size car market in which C-Medium is located has reached 8 million vehicles. Even if it does not increase, the market is very large. As a world-renowned car maker, Fiat is confident to win at least 2% market share.

According to the plan, by the next year, GAC Fiat will have an annual production capacity of 140,000 vehicles and an annual production capacity of 220,000 engines. By 2014-2015, it plans to form an annual production and sales scale of 250,000 to 300,000 vehicles.

Earlier this year, Fiat and Chrysler CEO Malchone once disclosed that "the next generation of Dodge cool beat will be made in China," and will sell it on behalf of Fiat. Industry speculation that the second domestic car of Fiat Fiat is likely to be Dodge Coolbo.