Nanjing- The first joint venture that car maker started was between Fiat and Nanjing. The Italian- Chinese joint-venture was established in 1999 and was based in Nanjing which 300 km. west of Shanghai. Nanjing Fiat Auto built the Fiat Palio, Fiat Palio Weekend, Fiat Siena and Fiat Perla cars. The Nanjing Automobile (Group) Corporation is a state-owned enterprise with a history that dates from 1947 making it the oldest of the Chinese automobile manufacturers. In 2005, Nanjing bought the British carmaker MG Rover.
In 2006, the Italian carmaker sold just 31,310 automobiles in China, down 13% from 2005. Fiat bosses accused that the Chinese Partner diverted its resources away from the joint-venture. After 8 years working together, the Nanjing and Fiat’s joint-venture fell apart. Chery Automobile- In 2007, Chery Automobile signed a memorandum of understanding with Italy’s Fiat to form a joint venture to make cars under both badges for the local market. The 50-50 venture, had to be located in the eastern city of Wuhu, Chery’s home base.
It was planned to build and market cars under the Fiat, Alfa Romeo and Chery badges in 2009, with an annual production of 175,000 units. The cars are intended for the China market. Unfortunately, the Chery spokesman Jin Yibo announced in March 2009 that the joint venture would not happen due to the economic recession. The strange thing is that China’s auto sales took a huge hit in 2009. The land of the Great Wall actually sold more cars and trucks in January and February than United States.
No date has been given for Fiat and Chery to begin building vehicles for China. Guangzhou Automobile- In 2009, Fiat signed a contract with Guangzhou Automobile Group, the 50:50 agreement will produce 140, 000 cars per year from 2011. The partners will invest 400 million Euros and build and build a 700, 000 sq m production plant in Changsha in Hunan province. Fiat needs to learn from its previous mistakes, in order to make this joint-venture successful. Power distance- Degree of inequality that exists and is accepted in one country among people with and without power.
High Power Distance score indicates that society accepts an unequal distribution of power and people understand ‘their place’ in the system. Low power distance means that power is shared and well dispersed. It also means that society members view themselves as equals. Individualism- Reflects the extent to which people prefer to take care of themselves and their immediate families, remaining emotionally independent from groups, organizations, and other collectivities.
A high IDV score indicates a loose connection with people. In countries with a high IDV score there is a lack of interpersonal connection and little sharing of responsibility, beyond family and perhaps a few close friends. A society with a low IDV score would have strong group cohesion, and there would be a large amount of loyalty and respect for members of the group. The group itself is also larger and people take more responsibility for each other’s well being.