Fiat Chrysler Automobiles plans to spend more than 5 billion euros ($5.7 billion) on new models and engines in Italy over the next three years to try to make better use of factories and boost jobs and margins.
in Automotive News Europe, by Agnieszka Flak & Gianni Montani | Reuters, 29-11-2018
The plans are intended to deliver on a strategy outlined by FCA’s late boss Sergio Marchionne in June, in which he made a commitment to keep converting Italian plants to build higher margin Alfa Romeos, Jeeps and Maseratis, and hybrid and electric versions of its vehicles to protect jobs and lift profitability.
FCA plans to build an Alfa Romeo compact SUV at its Pomigliano plant and a battery-powered Fiat 500 in its Mirafiori factory in Turin. Pomigliano also will produce a mild-hybrid version of the Fiat Panda hatchback.
Production of European versions of the Jeep Compass compact SUV will be added at FCA’s Melfi plant in central Italy. The factory already produces the Jeep Renegade.
FCA’s Cassino plant would get a re-styling of the Alfa Romeo Giulia and Stelvio models and will also produce a medium-size Maserati SUV.
FCA also plans to expand production capacity at its Sevel joint venture with PSA Group, which assembles the Ducato light commercial vehicle, given healthy demand.
The company will launch 13 new models or restylings of existing models in the 2019-2021 period and ensure that all plants in Italy reach full employment, FCA’s new European head, Pietro Gorlier, told unions and journalists in Fiat’s hometown of Turin on Thursday.
FCA appointed Gorlier last month to tackle a region where profitability is below that of rivals, thousands of workers are on temporary layoff schemes, and some plants run way below capacity.
A big part of the investments in Italy will focus on the development of electric and hybrid models and the creation of common platforms that can be used to develop different vehicles to boost efficiencies and flexibility, Gorlier said.
“These are investments that are capable of being implemented and kick off tomorrow morning,” Gorlier said, stressing that additional plans for Italy and other plants in Europe – in Poland, Serbia and Turkey – would be announced at a later stage.
Gorlier said the investments were based on an outlook for the market seen as “substantially stable” in the coming years, even though a slight contraction is expected in 2020 given introduction of stricter emissions regulations.
He said a previously announced target to discontinue production of diesel passenger cars in Europe by 2021 was “too aggressive” and the company would keep producing diesel models beyond that date. But he confirmed the overall trend towards a gradual shift away from diesel remained.
Union officials, who fretted when promises for full employment had slipped from 2015 to 2018 and then to 2022, welcomed the plans, especially the fact that they were being implemented immediately.
“We are very satisfied,” said Marco Bentivogli, secretary general at the FIM Cisl union. “We are talking about 5 billion euros out of a total five-year spend for EMEA of 8.7 billion euros that’s an extraordinary concentration of new products.”
Bloomberg contributed to this report