Iveco, the commercial vehicle unit of Fiat SpA, clinched a deal with two Chinese partners on Friday 16 December to produce heavy trucks in a 50-50 joint venture with Shanghai Automotive Industry Corp (SAIC).
Subject to approval by Chinese regulators, Iveco will acquire a 67 per cent stake of Hongyan Automotive Co Ltd, an HGV manufacturer in Chongqing, according to a statement issued by SAIC.
Following the acquisition, Iveco and SAIC plan to increase Hongyan's annual output from the current 15,000 to 40,000 heavy-duty trucks by 2008, using Iveco technologies. Iveco, SAIC and Hongyan will also build an engine plant in Chongqing with a planned capacity of 30,000 units annually by 2008.
The new joint venture will complement Iveco’s existing joint venture with Nanjing Automobile Group which produces some 20,000 Daily vans a year.
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