Fiat gets aggressive with 17 new models for Europe
BY COLLEEN BARRY Associated Press
Wednesday, October 31, 2012
10/31/12 at 7:11 AM
ROME - While European competitors close factories and get government bailouts, Italian carmaker Fiat is banking on its under-exposed luxury brands to restart idled Italian car plants and stem losses in its European operations.
Fiat CEO Sergio Marchionne announced an ambitious four-year plan Tuesday to ramp up production of Alfa Romeo and Maserati brands in Italy, where Fiat will launch 17 new models to be built in Fiat's five Italian plants from 2013-2016. Fiat, which owns U.S. carmaker Chrysler, also will unveil a new smaller Jeep for production in Italy, and focus the Fiat brand on the 500 and Panda compact car ranges.
"This is truly not for the faint-hearted," Marchionne said. ''We have not shied away from a fight."
Marchionne said he believes the investments, part of new capital expenditures of $21 billion to $23 billion in 2013-2014 across the Fiat-Chrysler alliance, could "provide a permanent solution" for the quandary facing his European plants, which are running below 50 percent capacity.
Under the plan, Fiat Europe, which lost $308 million in the third quarter alone, would break even by 2015-2016.
Fiat's move is the latest response by European automakers to the fifth consecutive year of declining car demand. There is general consensus that European factories are tooled to produced 20 percent more cars than the market can bear - cutting into the carmakers' bottom line.
Ford Europe announced its response last week, saying it would close factories in Belgium and Britain that will put some 6,200 European workers out of a job and take out 18 percent of its European capacity. Taking another tack, the French government has offered $9 billion in aid to PSA Peugeot, the No. 2 carmaker in Europe, in an attempt to stave off 9,500 layoffs.
Original Print Headline: Fiat gets aggressive with 17 new models for Europe