Sicilian financier Simone Cimino’s plan to convert Fiat S.p.A.’s Termini Imerese car factory to produce electric vehicles is expected to get the support of Mahindra & Mahindra Ltd., the largest SUV maker in India. In an interview, Cimino said that he has a preliminary agreement with Reva Electric Car Co. for the production of electric cars at Termini.
Cimino plans to invest up to 450 million euros ($602 million). Last May, Mahindra agreed to buy 55% of Reva, a closely held company based in Bangalore, India.
Fiat aims to stop production at the losing factory, which has 1,400 workers in Sicily and builds the Lancia Ypsilon model, by the end of 2011. The carmaker, which is based in Turin, loses 1,000 euros on each car produced at the plant.
The reasons pointed to are a lack of infrastructure and high shipping expenses. Cimino said that it has the “financial strength” to take in the work force and develop the plant. It’s likely that the private-equity funds that he manages may contribute up to 100 million euros to the project.
Pawan Goenka, president of Mahindra’s automotive and farm-equipment unit, divulged that his discussions with Cimino had been “positive” and that they had talked about a plan for the Sicilian factory. Goenka said that Mahindra likes his proposal but that it is “still at a very preliminary stage.” Invitalia S.p.A., an adviser to Italy’s Industry Ministry, is expected to soon announce a shortlist of bidders for the Termini plant.
A meeting this week has been set up in Rome so that the Italian government can receive an update on the situation and get to talk with union officials and Fiat representatives. Built in 1970, the Termini plant is located in one of the poorest regions of the country. [via autonews - sub. required]