Fiat Power Technology Chongqing Light Diesel Project has not been signed yet

Recently, there was a lot of news about Fiat Power Technology (FPT) planning to build a new light diesel engine project in Chongqing and building the Group’s important overseas commercial vehicle and parts manufacturing base. People began to pay attention to the development of the entire vehicle business of Fiat Group in China. It also traces the latest developments in the key powertrain business. To this end, the reporter interviewed the project investor Fang Hui, the president of Fiat Power Technology China.

â–  Project details are still discussing the plan

Speaking of a series of news on the cooperation and planning of the Fiat Power Technologies Chongqing light diesel engine project recently released by the Internet, Shen Hui pointed out that the letter of intent signed with the Chongqing Municipal Government on July 31, 2008 was aimed at establishing a wholly-owned company of Fiat Power Technology. OEM contract customer support, the annual production capacity of light diesel engines for export is about 100,000 units. The amount of investment of RMB 1.8 billion disclosed by some media is not related to the aforementioned projects, but is the total investment amount announced by the Iveco, Fiat Power Technologies, SAIC, and the Chongqing Municipal Government that was announced last year for the new heavy-duty diesel joint venture.

Fiat Power Technology is one of the eight major business units of Fiat Group. It is mainly responsible for the R&D and production of the Group's internal engine and axle business. About 30% of the business volume each year serves the external customers of the Group. Speaking of the news that the Group will build a light-duty diesel manufacturing base in Chongqing, Shen Hui, president of Fiat Power Technology China, told reporters that in July this year, Fiat Power Technology and the Chongqing Municipal Government signed a letter of intent for light-duty diesel intended to produce F1C light-duty diesel engines. All exports. The joint venture SAIC Fiat Hongyan Powertrain Co., Ltd., which was established last year, is responsible for producing medium-sized and heavy-duty diesel engines that meet the needs of domestic customers.

“At present, the light diesel engine project has not yet signed a contract and is still in the preliminary inspection and demonstration stage. There is news on the Internet that the project investment is 1.8 billion yuan, and 70% of the products will be exported, and these figures are inaccurate. The amount has not yet been determined.” Shen Hui corrected the rumor about the project to reporters.

Whether Fiat invests in a diesel engine project in Chongqing means that the Group’s strategic focus in China will gradually shift from vehicle production to parts production. According to Shen Hui, Fiat Power Technology China Shanghai R&D Center was built at the end of 2007 and is progressing rapidly. Achieving compelling results, Fiat Group attaches great importance to the comprehensive development of its eight business units in China and does not deliberately favor a single project.

■ Fiat’s location in Chongqing

It is understood that Fiat Power Technology intends to establish Chongqing as an important overseas commercial vehicle engine manufacturing base. What factors have Chongqing attracted Fiat? Shen Hui said: “Chongqing has three factors that have attracted Fiat investment. First, the Chongqing Municipal Government supports the introduction of diesel engine projects, attaches great importance to the Fiat Power Technology Cooperation Project, and the country supports the special development of the Western Region. The policy also attracts Fiat. Second, Fiat Power Technology has a good supplier base in Chongqing, which facilitates business management. Third, it is driven by economies of scale. Last year, Fiat Power Technologies invested in a medium- and heavy-duty commercial vehicle diesel engine company in Chongqing. With the addition of a light-duty diesel project, the Group will have better economies of scale. Taking into account the three factors mentioned above, Fiat Power Technology tends to choose Chongqing, which can be described as a time-to-day advantage.”

According to Shen Hui, Fiat Power Technology is the only powertrain company in the world that can produce a full range of diesel engines, gasoline engines, transmissions and axles. SAIC Fiat Hongyan, which was put into production this year, has the capability to produce medium- and heavy-duty engines. According to the current plan, 100,000 F1C light-duty diesel engines have low production costs, superior environmental performance, and emissions that meet the National V Standard, and the technology has reached the international advanced level. Currently, Fiat has received letters of intent from several OEMs to purchase this diesel engine.

â–  Chongqing attracts Fiat to meet supporting needs

It is understood that there is a large demand for advanced light diesel engines in China, but there are still fewer manufacturers. From a long-term development perspective, Fiat Power Technology's investment in a commercial vehicle diesel engine project will provide advanced complementary products for domestic commercial vehicle companies. Whether Chongqing will become an important overseas manufacturing base for Fiat Power Technology's commercial vehicles and parts? “Fiat Power Technology has invested in a commercial vehicle diesel engine project in Chongqing. The investment is relatively large. SAIC Fiat Hongyan has developed smoothly, bringing confidence to Fiat Investment. From the perspective of capacity planning, we really hope to make Chongqing a global manufacturing base for commercial vehicle diesel engines. Fiat Power Technology has invested in a large-scale production base and R&D center in China, supporting the development and expansion of China's own brands.” Speculation from the outside world.

Previously, Chongqing had prepared land for SAIC Iveco Hongyan and SAIC Fiat Red Rock in a Chongqing investment project, in which the entire vehicle project covers an area of ​​680 mu, and the engine project covers an area of ​​about 300 mu. The original Chongqing heavy-duty truck plant will be reconstructed. As a key parts production base. The reason for the introduction of Fiat Power Technology's diesel engine project in Chongqing is not only to increase local taxes but also to stimulate employment. It also hopes to build a commercial vehicle diesel engine base and provide supporting services for Chongqing auto companies.

According to Gong Xiaochuan, Director of the Industry and Development Division of the Chongqing Municipal Development and Reform Commission, the automobile industry is the largest economic pillar in Chongqing. Perfecting parts and components is an inherent requirement for economic development. “The annual output of Chongqing automobile companies is more than 700,000, and the scale of manufacture is relatively large, but the parts and components are relatively late. Many companies like Chang’an, Lifan, etc. are hoping to have closer parts suppliers, and Fiat is investing in commercial vehicle diesel engines in Chongqing. Can meet the needs of supporting enterprises, Chongqing automotive industry development plans to regard parts and components as a key.” Gong Xiaochuan told reporters.

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