China's fast-growing Chery Automobile Co., Ltd. and Italy's Fiat Auto have signed an agreement that Chery will supply Fiat with 100,000 engines a year, Xinhua learned on Monday.
The agreement was reach eight months after the two sides inked the memorandum of understanding on the deal.
"The agreement means that Fiat, who had been testing Chery's engines during the past year, have recognized the technologies and quality of the engines developed by Chery," Zhou Biren, deputy general manager of Chery, told Xinhua.
Chery became China's fourth largest producer of passenger cars in 2006, with sales of 305,200 vehicles and a 7.2-percent market share in China.
Zhou said that both Fiat and Chery are exploring possibilities on cooperation that is not confined to Chery assembling a certain model of Fiat.
"We have decided to continue to discuss it in details, since the cooperation is very important for us both sides and we will have a lot more issues to consider," Zhou said.
In an interim report, Chery said its exports soared to 52,712 vehicles in the first six months, compared with 13,548 reported in the same period of last year, and the overseas sales will top 100,000 vehicles for the whole year.