Fiat will boost investment in new products this year

Article by Christian Andrei, on August 26, 2010

Fiat S.p.A.'s launching of key models was put off the past 15 months due to a spending freeze; but this year, the carmaker plans to boost its investment in new products.

The investment freeze from October 2008 to December 2009 followed the collapse of the global financial markets. As a result, the launch of the Fiat Panda successor and replacements for the Alfa Romeo 147 and Lancia Ypsilon was delayed. 

Fiat CEO Sergio Marchionne said last week that Fiat will return to normal investment levels this year to benefit from an expected European market recovery in 2011.

In a telephone conference with financial analysts on Jan. 25, Marchionne said that the freeze was necessary and that it would have been a waste to launch the key models onto an uncertain market.

He asserted that the company intelligently postponed some of its programs to make sure that it coincided with the structural recovery in demand in 2011 and later years.

Fiat plans to invest about 4.5 billion euros this year, up from 3.38 billion euros last year. The investment is cut by nearly 32% in 2009 from 4.97 billion in 2008.

If scrapping incentives are renewed in Italy, Fiat anticipates the total Western European market to fall to 12 million units from 13.6 million last year. But with no Italian scrappage renewal, the market is expected to drop to 11.5 million.

Topics: fiat, investment

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