Italian industrial giant Fiat Group plans to spend more than 16 billion yuan in China in the years to 2010 to help it achieve a fivefold rise in annual sales revenue in the country.

The money will be put in sectors such as passenger cars, trucks, engines and spare parts, auto financing and tractors, said Douglas Schenk, CEO of Fiat (China) Business Co Ltd.

Schenk said the group expects to grow its China sales from more than $1 billion last year to $5.5 billion in 2010, including $3 billion for passenger cars, $1.5 billion for trucks, $600 million for engines and spare parts and $400 million for other businesses.

A visitor passes a Fiat poster at an exhibition in Nanjing, capital of East China's Jiangsu Province. [newsphoto]

Fiat has invested $1.5 billion in China since it built its first plant locally in 1986.

Andrew Humberstone, chief representative of the group's largest division, Fiat Auto, said the firm will produce three car models - Fiat Linea, Grande Punto and Alfa Romeo 159 - in China in the coming years to boost sales.

The carmaker aims to sell 263,000 cars a year by 2010 from more than 30,000 units last year, Humberstone said.

"Growth potential in China's car market is phenomenal as most customers are first-time buyers," he said.

But Fiat Auto lags far behind many of its rivals in China in terms of sales, such as General Motors, Volkswagen, Toyota and Hyundai.

It now runs a car venture with Nanjing Automobile Corp in the eastern city of Nanjing, making the Palio, Siena and Perla models.

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Fiat Auto has reportedly reached an agreement with another Chinese carmaker, Chery Automobile Co, to assemble the Alfa Romeo 159 in the small eastern city of Wuhu.

Last October, Chery clinched a deal with Fiat Auto to supply 100,000 petrol engines to the latter for cars built both in China and abroad.

Iveco, Fiat Group's commercial vehicle division, is building a 40,000-unit heavy truck plant and a 100,000-unit diesel engine factory in the western city of Chongqing with China's top auto group SAIC Motor Corp and Hongyuan Motor Co, a local truck maker.

Iveco now has a partnership with Nanjing Automobile to make wagons.

Schenk said Fiat Group has also got the green light from the government to open an auto financing business in China. The group's China auto financing branch, based in Shanghai, will provide loans to Chinese buyers in the first half of next year, he said.