Guangzhou Automobile Group which already has partnerships with Honda and Toyota has agreed to a joint venture with Fiat of Italy. 

The two manufacturers will invest more than 400 million euros in the venture, which is due to start production for China’s market in 2011. 

Formery Fiat had a partnership with Nanjing Automobile Corporation until 2007 when Nanjing pulled out of the venture amid plunging sales.

The Italian manufacturer then agreed a deal with Chery, China’s largest carmaker, but that was put on hold earlier this year by the global financial crisis.