By Gilles Castonguay
MILAN--Italy's Fiat SpA (F.MI) plans to produce a second car in
China as it looks to increase its presence in the world's biggest
market where its sales trail far behind those of its competitors, a
person familiar with the matter said Wednesday.
Fiat will show off the Ottimo at the Guangzhou motor show on
Thursday, according to a person. The hatchback is derived from the
Viaggio sedan, which is the only other model that it builds in the
country.
The person was unable to provide any more details, and Fiat
declined to comment ahead of the unveiling.
Fiat will build the vehicle at the Changshan plant it shares
with its joint-venture partner Guangzhou Automobile Group Co
(2238.HK). Fiat is struggling to fill production capacity at the
plant, which can produce 140,000 units a year. Sales of the
Viaggio, which is produced at the facility, totaled 11,228 units in
2012 and are forecast to reach 37,913 in 2013, according to IHS
Global Insight.
Fiat also imports to China the Freemont sport-utility vehicle
and the 500 city car.
Despite the size and importance of the Chinese market, Fiat has
a meager share of about 1% because it wasted a lot of time changing
local partners until settling with Guangzhou.
In the first 10 months of the year, China was responsible for
more than half of the 156,000 unit sales Fiat reported for the
Asia-Pacific region, according to the latest figures posted on its
website. In the region, it also sells models from the Dodge and
Jeep brands, which belong to U.S. unit Chrysler Group LLC. Earlier
this year, it signed a deal to produce Jeeps at the Changshan
plant.
Bigger rivals like Volkswagen AG (VOW.XE) and General Motors Co
(GM) sell far more in China alone, with unit sales going into the
millions.
Despite the region's small contribution to Fiat's earnings, it's
nevertheless more profitable than the Italian auto maker's
traditional European market, where demand is stagnant due to the
weak economy in the euro zone. In the first nine months of the
year, the Asia-Pacific made 270 million euros ($364.87 million) in
earnings before interest and taxes, or Ebit, compared with a loss
of EUR304 million in Europe.
Write to Gilles Castonguay at gilles.castonguay@wsj.com;
Twitter: @GRCastonguay
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