Fiat Power Technology (FPT) has recently been making headlines in China with plans to build a new light diesel engine project in Chongqing, as well as establish an important overseas commercial vehicle and parts manufacturing base. This has sparked renewed interest in the broader automotive business of the Fiat Group in the country, especially regarding its powertrain operations. To gain more insight, a reporter spoke with Fang Hui, the president of Fiat Power Technology China. **■ Project Details Are Still Under Discussion** Regarding the recent online reports about FPT’s collaboration and planning for the Chongqing light diesel engine project, Fang Hui clarified that the letter of intent signed with the Chongqing Municipal Government on July 31, 2008, was aimed at setting up a wholly-owned company by FPT. This initiative is intended to support OEM customers, with an annual export capacity of approximately 100,000 light diesel engines. However, the reported investment of RMB 1.8 billion in some media outlets is not related to this project. Instead, it refers to the total investment announced last year by Iveco, FPT, SAIC, and the Chongqing government for a joint venture producing heavy-duty diesel engines. As one of the eight major business units under the Fiat Group, FPT focuses on the research, development, and production of internal engines and axles. About 30% of its business serves external clients. Fang Hui explained that while there have been rumors about a new light diesel engine manufacturing base in Chongqing, the project is still in the early stages of feasibility studies and has not yet resulted in a formal contract. Some online claims about the investment amount and export percentages are inaccurate and not confirmed. **■ Fiat's Strategic Move to Chongqing** Chongqing has emerged as a key location for Fiat Power Technology, with the city being considered an essential overseas commercial vehicle engine manufacturing base. According to Fang Hui, three main factors attracted Fiat: first, strong support from the Chongqing municipal government, along with national policies encouraging development in western China; second, a solid supplier network already in place in the region; and third, the potential for economies of scale. With the existing medium- and heavy-duty engine plant already operational, adding a light diesel engine project would further enhance efficiency. Fiat Power Technology is unique in that it is the only global powertrain company capable of producing a full range of diesel, gasoline engines, transmissions, and axles. The newly launched SAIC Fiat Hongyan Powertrain Co., Ltd. is now producing medium- and heavy-duty engines tailored for the Chinese market. Meanwhile, the F1C light diesel engine is expected to offer low production costs, superior environmental performance, and compliance with National V emission standards—technology that is internationally competitive. **■ Chongqing Attracts Fiat for Supporting Needs** With a growing demand for advanced light diesel engines in China, but limited local manufacturers, FPT’s investment is seen as a strategic move to provide high-quality components for domestic commercial vehicle companies. Whether Chongqing will become a global manufacturing hub for Fiat’s commercial vehicle parts remains to be seen, but the company is optimistic. The city has already allocated land for projects involving SAIC Iveco Hongyan and SAIC Fiat Red Rock, with the entire vehicle project covering 680 mu and the engine project around 300 mu. The original heavy truck plant is being renovated to serve as a key parts production base. Beyond tax revenue and job creation, the goal is to build a robust commercial vehicle diesel engine industry that supports local 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 backbone of Chongqing’s economy. Developing a strong supply chain is crucial for continued growth. With many local automakers seeking closer partnerships with suppliers, FPT’s presence in Chongqing aligns well with these long-term goals.

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