The proposed joint venture between Japanese automaker Subaru and China’s Chery is ready to be approved, sources involved in the matter say.
According to reports from Chinese media, the Chinese government has imposed two conditions to Subaru’s owner Fuji Heavy Industries. First and foremost, the Japanese need to allow their vehicles to be branded with the Chery logo and secondly, the sales network in China should be headed by Chery.
Fuji Heavy Industries signed an agreement to establish a joint venture with Chery Automobile at the beginning of the year, with both parties agreeing to open a production site in Dalian, Liaoning region. Subaru’s sales partner in China, Pang Da Group, is in favour of the new joint venture.
The initial joint venture proposal failed to be approved by the National Development and Reform Commission, with the reason being that Toyota, which owns 16.5 percent of Fuji Heavy Industries, already has separate joint ventures in China. The commission rejected the proposal in September, casting a shadow of uncertainty over the project.
However, if Subaru agrees that its vehicles carry the Chery logo and that Chery will lead the joint venture’s sales network, the deal could be approved. No other changes to the proposal need to be made for official approval.