After two failed partnerships, Fiat is set to begin building again in Changsha.
Struggling Italian carmaker Fiat S.p.A. will finally begin production in the world's largest auto market, following two failed joint venture partnerships. The new factory in Changsha, capital of central China's Hunan province, has already begun producing the Viaggio compact car. Nonetheless, Fiat CEO Sergio Marchionne realises the company is “showing up too late” for the party and briefed workers at the plant that they still had “a lot of work to do.”
Fiat delivered just 991 vehicles in China last year, but looks to boost annual sales of locally built cars to a colossal 200,000 in 2014. Jack Cheng, general manager of the joint venture between Fiat and GAC, is confident that the Italian brand can gain a foothold in the world's largest auto market.
However, Han Weiqi, a Shanghai-based analyst with CSC International Holdings Ltd, is less optimistic: “Fiat's brand recognition is far behind the market leaders such as Volkswagen, GM and Toyota, and they will need to compete on value for money.” Fiat's success in China will depend on their brand positioning as an affordable foreign car that is less expensive than a VW or an Audi, but more prestigious than a Dongfeng or Great Wall motor.