John Elkann, vice president of Fiat, has held discussions with Chongqing vice mayor Tong Xiaoping, about the Italian auto giant’s plan to establish a new engine works in Chongqing.

Fiat has two existing enterprises in the city and Mr Elkann said the new plant would provide high quality engines for customers across the country. Mr Tong said Fiat would play an important role in developing Chongqing as a motor city in west China.

Meanwhile, passenger car sales by Ford Motor’s joint venture with Chongqing Changan Automobile rose 80 per cent in October from a year earlier to 20,027 units, Dow Jones reported. In the January-October period, passenger car sales of Changan Ford Mazda Automobile rose 40 per cent year-on-year to 188,244 units.

In late September, Changan Ford Mazda broke ground at a US$490m new plant in Chongqing, which will increase the passenger car venture’s annual capacity to 600,000 units by 2012.