Fiat, Chrysler planning to produce 280,000 small SUVs a year in Italy

Article by Christian Andrei, on July 6, 2013

Fiat and Chrysler are planning to produce up to 280,000 small sports utility vehicles annually in Italy for the Fiat and Jeep brands, sources told Automotive News Europe. The carmakers will commence producing a still-unnamed Jeep variant in June 2014 and will build the Fiat 500X three months later.

The Jeep variant will have a planned volume of up to 150,000 units while the Fiat 500X will have a production volume of 130,000, two suppliers involved in the project told Automotive New Europe.

In December 2012, Fiat announced it would make over a billion-euro investment to expand its Melfi site in Italy to accommodate the production of the small SUVs. This production plan is vital to Fiat's target to increase capacity usage and to end losses in Europe by concentrating on producing higher-margin models.

Fiat plans to roll out 19 Italy-built models through 2016, including nine Alfa Romeos and six Maseratis. The carmaker plans to hike output of Fiat and Chrysler models in Europe to 2 million cars annually by 2016 from 1.2 million this year. Fiat-Chrysler chief executive Sergio Marchionne hopes to bring the Italian carmaker's operations in Europe to breakeven by 2015/2106 by using Fiat's Italian plants to export cars around the world.

Slumping sales and dire economic situation in Europe has prompted Fiat to reduce its trading profit target in 2014 by 31 percent to EUR5.2 billion. Fiat's Europe-wide production plan entails using 15 percent of its production capacity in Italy, Poland, Serbia and Turkey for exports.

The plan is expected to burn through EUR3 billion annually through 2014, according to a chart shown during a presentation on Fiat's Web site in December 2012. Fiat and Jeep are planning to enter small SUV segment, which is expected to grow to 500,000 sales in Europe by 2015, according to IHS Automotive.

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