Fiat S.p.A. is planning to focus global production of the next-generation 500 minicar at its Tychy plant in Poland, three sources privy to the matter told Automotive News Europe. The move will effectively end the production of the Fiat 500 for North American markets at Chrysler's plant in Mexico by 2015. The move, however, means additional work for the Tychy plant, which has been struggling since the carmaker shifted production of the Panda minicar to Italy.
According to the sources, Fiat will launch the new-generation 500 in 2015 and will be sold around the world. Although almost identical in styling, the current European and North American 500s are different structurally. Producing a new Fiat 500 with global specifications in one plant will allow the Italian carmaker to avoid duplicating engineering and tooling costs sustained with the current generation car.
Fiat spent EUR300 million to launch the European 500. On the other hand, Chrysler, which produces the North American 500 under license from Fiat, invested $550 million to increase its production capacity for the variant to 120,000 units a year in Toluca, Mexico. Massimo Vecchio, a financial analyst at Mediobanca Securities, told Automotive News Europe that having a single production site is a logical move when making the next Fiat 500 a global model.
Vecchio remarked that producing the next-generation Fiat 500 only in Poland will help the carmaker hike capacity utilization at its Tychy site as free capacity in Toluca to allow Chrysler to build more core products bound for North America. The Tychy plant has been struggling due to the current slump in vehicle sales as well as from losing production of the Panda. Fiat decided in 2011 to build the third-generation Panda at its Pomigliano d'Arco plant in Italy to protect jobs in its home country.