China's Chery Automobile Co., Ltd. will supply 100,000 gasoline engines a year to Italy's Fiat Auto under a memorandum of understanding signed on Tuesday in east China's Anhui Province.

The 1.6-liter and 1.8-liter gasoline engines will be provided for Fiat cars produced both in China and abroad, according to cooperation agreement signed in Wuhu City, the base of Chery Automobile.

"This successful cooperation shows Fiat's trust in Chery and is a significant step for Chery to go abroad by relying on its own innovation," said Yin Tongyao, chairman and general manager of Chery.

"Chery is a young and modern company with a solid technical background, and I am very glad to welcome this further step in our strategic alliance," said Sergio Marchionne, chief executive officer of Fiat.

Founded in 1997, Chery Automobile produces automobiles and auto parts. It has an annual capacity of 400,000 engines.

Last year, Chery Automobile sold 189,100 cars, an increase of 118 percent from 2004. The company exported 18,000 vehicles in 2005, more than any other Chinese domestic car makers.

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