(autoinsidernews) - Italy's Fiat said today that its automotive division, Fiat Auto, had signed a memorandum of understanding with Chinese carmaker Chery Automobile, to have the Chinese company supply 1.6L and 1.8L gasoline engines for car made in China and outside the country. The two companies expect an annual supply exceeding 100,000 engines. Fiat said it expects to sign a definitive agreement before the end of the year.
The agreement with Chery will give us the opportunity to further increase the competitiveness of our product range on the international markets, Fiat CEO Sergio Marchionne said in the statement. Marchionne added, We see the potential for a wider cooperation both in powertrains and, eventually, in other automotive sectors.
Sources say Fiat choose Chery as a partner because its joint venture with Nanjing Automobile Group has been losing money, even as other foreign carmakers are making solid profits in China, reports Trend.