China’s Chery Auto is already reported to be in a deal with DaimlerChrysler to build a new small car for export under the Dodge brand, as well as a previous deal with Italy’s Fiat to supply a range of engines, but now the company is reported to be at the negotiating table once again. This time ‘round, Chery is looking at forming a possible joint venture to build Fiat cars in China. According to industry sources, and reported by the China Daily newspaper, "Chery will register a new subsidiary to team up with Fiat in an attempt to remain an independent brand."

Chinese government officials have confirmed that the talks are in place but declined to give further details. Zhan Xialai, Party secretary of Wuhu, last month told the newspaper, "Fiat made overtures to us for additional cooperation."

Fiat currently makes its Palio and Siena subcompact cars and Perla compact sedan in a partnership with Nanjing Auto, but "it seems unsatisfied with its partnership with Nanjing Automobile. So it hopes to find a new partner in China," said industry analyst Song Bingshen.