Fiat group will be expanding its operations in China with the latest confirmation that it will be building its Alfa Romeo 159 saloon in China. The cars will be built under the recently formed joint-venture between Fiat and China’s Chery Auto, with production tipped to start in Chery’s plant in Wuhu just outside of Shanghai. The announcement comes from several Alfa execs who spoke recently with Automotive News, revealing that roughly 30,000 to 35,000 cars will be manufactured starting in 2009.

Earlier this month, Fiat CEO Sergio Marchionne revealed that the Italian giant was in talks with Chery surrounding a possible deal to build Alfas but until now there was no mention of which models would be produced.

Despite rising demand for Alfa Romeos in China, production is still at least two years away and according to Marchionne, the talks are yet to be finalized. He added that the Chinese built Alfas must have the high levels of quality expected from a premium brand and that it would take some time to iron out the bugs.

The other major hurdle is to find a supplier either in China or outside that is willing to build quality components for Alfa’s Chinese operations. Fiat originally hoped to build the previous 156 sedan in China but had to drop its plans due to a lack of suitable suppliers. The reason is that it’s more lucrative for the suppliers to sell the parts to western countries where Alfa Romeo models are sold.