Subaru and Chinese automaker Chery entered talks to form a joint-venture at the beginning of this year. The two were initially planning on building a $369 million production plant in the city of Dalian, not far from the border with North Korea.
Several weeks ago, China’s National Development and Reform Commission said in a statement that it was opposed to a joint-venture between the two on the grounds that Subaru was owned by Toyota. The latter already has two joint-ventures in China, the maximum allowed. For the record, Toyota only holds 16.5% of Fuji Heavy Industries, Subaru’s parent group.
The government’s word was seen by many as the end of the joint-venture but a recent announcement has revived it.
In order for the venture to gain the approval of Chinese officials, Subaru will have to agree to let Chery take the reins in its home country. This means that Subarus will be sold with a Chery badge and through a Chery-run dealer network, which will include some existing dealers.
If Subaru agrees to these terms, the joint-venture is expected to be given the green light. So far the Japanese automaker has not commented on the matter.
The joint-venture with Subaru is not Chery’s first attempt to team up with a foreign automaker. In the past, it has inked deals with Chrysler and Fiat but both have failed. Nevertheless, Chery remains a big player in China, especially on the economy end of the market. The Chery QQ, the unofficial clone of a Daewoo Matiz, is one of the best-selling economy cars there.
