In recent months, there has been a surge of news regarding Fiat Power Technology (FPT) planning to establish a new light diesel engine project in Chongqing, as well as developing an essential overseas commercial vehicle and parts manufacturing base. This has sparked renewed interest in the overall development of Fiat Group’s vehicle business in China, particularly in relation to its key powertrain operations. To gain deeper insights, the reporter had the opportunity to speak with Fang Hui, the president of Fiat Power Technology China. **■ Project Details: Still Under Discussion** When asked about the recent online reports regarding FPT's collaboration and plans 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 of FPT. This initiative is intended to support OEM customers, with an annual export capacity of approximately 100,000 light diesel engines. However, the RMB 1.8 billion investment mentioned by some media outlets does not pertain to this specific project. Instead, it refers to the total investment announced last year by Iveco, FPT, SAIC, and the Chongqing Municipal Government for a new heavy-duty diesel joint venture. As one of the eight major business units within the Fiat Group, FPT is primarily responsible for the research, development, and production of internal engines and axles. Approximately 30% of its business serves external customers. Regarding the news about building a light-duty diesel manufacturing base in Chongqing, Fang Hui explained that in July of this year, FPT signed a letter of intent with the Chongqing government to produce F1C light-duty diesel engines, all of which will be exported. The joint venture SAIC Fiat Hongyan Powertrain Co., Ltd., established last year, is focused on producing medium- and heavy-duty diesel engines tailored to domestic needs. "At present, the light diesel engine project has not yet reached a formal contract stage and is still in the preliminary planning and feasibility study phase," Fang Hui said. "Some online reports stating that the project involves an investment of 1.8 billion yuan and that 70% of the products will be exported are inaccurate. These figures have not been officially confirmed." The potential investment in a diesel engine project in Chongqing may signal a strategic shift for the Fiat Group from vehicle production to parts manufacturing in China. According to Fang Hui, the Fiat Power Technology China Shanghai R&D Center, built at the end of 2007, has made significant progress and delivered impressive results. The group places great importance on the comprehensive development of its eight business units in China, without favoring any single project. **■ Fiat’s Presence in Chongqing** It is understood that FPT aims to position Chongqing as a key overseas commercial vehicle engine manufacturing base. What makes Chongqing attractive to Fiat? Fang Hui outlined three main factors: First, the Chongqing Municipal Government actively supports the introduction of diesel engine projects and emphasizes the cooperation with FPT, while national policies supporting the development of the western region also play a role. Second, FPT already has a strong supplier network in Chongqing, which facilitates efficient business management. Third, economies of scale are a driving force. Last year, FPT invested in a medium- and heavy-duty commercial vehicle diesel engine company in Chongqing. With the addition of a light-duty diesel project, the group can achieve even better cost efficiencies. Taking these factors into account, Chongqing is seen as a strategic choice for FPT. Fiat Power Technology is the only global powertrain company capable of producing a full range of diesel, gasoline engines, transmissions, and axles. The recently launched SAIC Fiat Hongyan has the capability to produce medium- and heavy-duty engines. According to current plans, 100,000 F1C light-duty diesel engines will be produced annually, featuring low costs, superior environmental performance, and emissions compliant with National V standards. The technology is considered internationally advanced, and several OEMs have already shown interest in purchasing these engines. **■ Chongqing Attracts Fiat to Meet Supporting Needs** There is a growing demand for advanced light diesel engines in China, but few manufacturers currently meet this need. From a long-term perspective, FPT’s investment in a commercial vehicle diesel engine project could provide much-needed complementary products for domestic commercial vehicle companies. Will Chongqing become an important overseas manufacturing base for FPT’s commercial vehicles and parts? Fang Hui stated that the investment in the diesel engine project is substantial, and the smooth operation of SAIC Fiat Hongyan has boosted confidence in the project. “From a capacity planning perspective, we hope to make Chongqing a global manufacturing hub for commercial vehicle diesel engines. FPT has invested in large-scale production bases and R&D centers in China, supporting the growth of Chinese brands.” Previously, Chongqing had allocated land for SAIC Iveco Hongyan and SAIC Fiat Red Rock as part of a larger investment project. The entire vehicle project covers 680 mu, while the engine project occupies around 300 mu. The original Chongqing heavy-duty truck plant will be renovated to serve as a key parts production base. The reason for bringing FPT’s diesel engine project to Chongqing goes beyond increasing local tax revenue—it also aims to create jobs and build a commercial vehicle diesel engine base to support local auto companies. According to Gong Xiaochuan, Director of the Industry and Development Division at the Chongqing Municipal Development and Reform Commission, the automobile industry is the largest economic pillar in Chongqing. Developing a complete supply chain is essential for sustained growth. “Chongqing’s automotive companies produce over 700,000 vehicles annually, but their parts and components sector lags behind. Companies like Chang’an and Lifan are eager to work with closer suppliers, and FPT’s investment in commercial vehicle diesel engines in Chongqing meets these needs. The city’s development plan clearly identifies parts and components as a key area for future growth,” Gong told reporters.

Tungsten Heavy Alloy Rod for aircraft industry

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