Chery-picked!

A NEW engine deal between China's Chery Automobiles and Italy's Fiat Auto could lead to Fiat's new Punto hatch being manufactured in China for Australian consumption.

Under the recent agreement, Chery will supply more than 100,000 1.6 and 1.8-litre petrol engines annually for Fiat vehicles built both inside and outside of China.

In a separate arrangement, Fiat's new Linea small sedan – which was revealed at the Istanbul motor show earlier this month – will be built in China, powered by the Chery engine and produced predominantly for sale in China and the surrounding region.

But Fiat Cars president Luca de Meo refused to rule out the possibility that Australia’s Punto could eventually also be built in China.

"If we decide one day that we will produce the Punto in China ... we may consider it, but for time being the cars will come from Italy for Australia," he said.

"It's not in the plan to produce Punto in China right now. We will see, mainly based on the potential within the Chinese market and there we are talking big potential volume.

"The market there this year will be four million (per annum), in two years it will be six or seven million and in just a few years it will be beyond 10 million.

"So whether we would source from China cars for Australia today is really a question mark – it's too far away.



Left: Fiat Linea.

"It's a very sensitive issue because we have partners that were are in negotiations with.

"The only product we have announced we will be produced in China is the Linea sedan."Mr de Meo said the Chery engines could easily be adapted to Punto, for sale in China – or beyond.

"The first intention is to put this (engine) in the new Linea because it fits perfectly the demand in many markets, then we will consider if it can be installed in the Punto.

"The Linea is the same at the front as Punto, so when you install it in Linea it's very easy to install in Punto.

"These engines are critical to the international development of Fiat, because that kind of relatively low-cost mid-size engine, with both manual and automatic transmissions, is pretty much a world engine that can be sold anywhere from Iceland to New Zealand, so we're going to install this engine in our volume platforms," he said.