China's Nanjing Auto and Italy's Fiat have decided to breathe new life into their partnership by respectively investing an additional three billion yuan (US$389.6 million) in their joint venture Nanjing Fiat.

There had been reports that Fiat was likely to end its partnership with Nanjing Auto as the Chinese company delayed investing in the joint venture despite the Italian auto giant's plan to invest 500 million euros over five years in a drive toward meeting its 2010 sales goal of 300,000 vehicles in China.

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Fiat chief executive Sergio Marchionne said earlier this month that his company would quit from Nanjing Fiat's management team and no longer let the joint venture produce new models, including the D 200.

With the help of the government departments in Jiangsu Province, the two companies become reconciled but Nanjing Auto, with its financial resources concentrated on the MG project, would have to turn to bank loans for the investment, Saturday's Shanghai Securities News reported.

In 2005, Nanjing Auto acquired the bankrupt British carmaker MG Rover Group and its engine producer, Power Train Ltd, for 53 million pounds. The Chinese company unveiled its MG 7 series in March this year.

To make a concession, Fiat decided to put the D 200 into production at Nanjing Fiat, said the report, without giving details about the timing.

Lack of capital was not the main reason for the delayed investment by Nanjing Auto because company chairman Wang Haoliang previously insisted that Fiat should not cooperate with Chery, another Chinese auto maker, and the Chinese-made D 200 and Alfa Romeo should be launched in Nanjing Fiat, said the report.

"Before August this year, however, Chery and Fiat would hopefully announce their cooperation," said the report.

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