Fiat Chrysler to spend $5.7B to revamp Italy car plants
Fiat Chrysler Automobiles NV will spend 5 billion euros ($5.7 billion) through 2022 on the carmaker’s factories in Italy, stepping up the pace on making more in-demand sport utility vehicles and electric cars, people familiar with the plans said.
The increased outlay will finance Fiat’s plan to build a compact Alfa Romeo SUV at the Pomigliano plant, hometown of Italy Deputy Premier Luigi Di Maio, and a battery-powered Fiat 500 in Turin’s Mirafiori factory, the people said, declining to be named because the information isn’t public. The manufacturer’s Italian sites for years have struggled to run at full capacity, raising costs.
In addition, a second model under the Jeep brand will be manufactured in southern Italy to tap into burgeoning demand for SUVs. The investment will allocate more than 11 percent of Fiat’s average 8.7 billion-euro global expenditure through 2022 on product overhauls and electric cars to Italy.
A spokesman for Fiat declined to comment.
The Italian-American carmaker’s plans for Italy, set to be officially announced later Thursday, comes as the company grapples with an increasingly lopsided business that saw North America account for some 97 percent of profit during the third quarter. Earlier this week, General Motors Co. said it’s shuttering seven factories globally and shedding more than 14,000 jobs to cut unprofitable models and juggle unprecedented spending on new technologies with an uncertain payoff.
Fiat will keep all Italian factories open, the people said earlier. A third pillar of Fiat’s plan adds the compact Jeep Compass SUV to be made alongside the Renegade and the Fiat 500X in Melfi, southern Italy, they said. Deliveries for the brand surged 61 percent in the year through October in Europe, contrasting with a decline of 2 percent for the group.