Chrysler investing $600 million to build a new generation of Fiat-based cars

Article by Christian Andrei, on October 30, 2010

To create a new generation of Fiat-based vehicles, Chrysler Group is investing $600 million in its Belvidere, Ill., assembly plant. Chrysler said that this investment will cover the costs to construct a new 638,000-square-foot body shop and to install new machinery, tooling and material handling equipment. Just this summer, work on the expansion had started.

It’s expected to be completed in 2011. According to Chrysler spokeswoman Jodi Tinson, the company isn’t ready to give further comments about the future models. However, a source has divulged that the new models will include a new Dodge compact sedan to be launched in 2012.

Currently, the Belvidere plant produces the Dodge Caliber, and Jeep Compass and Patriot crossovers. The source also said that the new Dodge sedan, which will replace the Caliber, will be the first of a series of vehicles based on a Fiat-derived architecture called Compact Wide. In Chrysler's five-year product plan revealed last November, there are plans for a Chrysler compact sedan in 2013.

Last month, Chrysler CEO Sergio Marchionne told reporters in Turin, Italy, that there will be a 40 mpg version of the new Dodge compact sedan.

Producing a Chrysler Group model in the US that offers 40 mpg is the second of three milestones that Fiat has to achieve to raise its stake in Chrysler to 35% in three increments. Fiat currently controls 20% of Chrysler.

Marchionne said that Chrysler will hit the first of those three milestones when it starts to produce Fiat's 1.4-liter FIRE MultiAir engine in Dundee, Mich., sometime between the end of this year and the first quarter of 2011.

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