Partners on road to producing China Fiat

Italy's largest carmaker, Fiat Automobiles SpA, and Chinese auto producer Guangzhou Automobile Group Co Ltd (GAC) are forming a 50-50 joint venture to produce cars and engines starting in the second half of 2011.

The agreement was signed in Rome yesterday during President Hu Jintao's visit to Italy and came as China overtook the US as the world's largest car market.

The two companies will invest more than 400 million euros ($556 million) on the venture, according to a statement from Fiat.