Shanghai Daily news

Iveco Corp, a subsidiary of Fiat Automobile Group Corp, will team up with two leading domestic automakers to start making heavy trucks in China.
Iveco, a global specialist in cargo trucks, has signed an operational agreement with Shanghai Automotive Industry Corp to form a 50-50 joint venture, SAIC Iveco Commercial Vehicles Co Ltd. The new firm will produce transport vehicles using Iveco's technology.
The joint venture bought a 67 percent stake in Chongqing Hongyan Automobile Group Corp in central China, a subsidiary of Chongqing Heavy-duty Automobile Group Co Ltd, one of China's leading trucks makers, to establish another company making diesel engines.
The deal was made a year after the firms signed a framework agreement to develop a long-term relationship in the commercial-vehicle industry. The total investment was not revealed.
After the acquisition, SAIC Iveco will be able to produce 40,000 trucks and 30,000 engines annually by the end of 2008.
The average growth rate for heavy-duty trucks was 47 percent in China from 1999 to 2004, more than double the pace of passenger car growth.
"The venture marks extensive cooperation with SAIC, the second-largest domestic automaker, which will help Iveco expand its presence in the most promising market with more competitive prices," said Paolo Monferino chief executive officer of Iveco Crop, which also cooperates with Nanjing Automotive Corp in China.
SAIC will focus more on the development of commercial vehicles in the next five years, significantly increasing its production capacity and sales in heavy-duty trucks in a move to acquire a leading position in the segment.
Chongqing Heavy-duty Corp will also benefit from the cooperation as it will gain more access to coastal cities, where demand is surging in transport.
Iveco withdrew its investment in another partner, Changzhou Bus Group, as foreign automakers are allowed to set up no more than two joint ventures in each market segment.