Fiat Begins Investing in Melfi Plant by the End of 2012 image

Marchionne announced he will start investments at the Melfi plant by the end of this year.

“Next week we will send our technicians down (to the plant),” he told Corriere della Sera newspaper in an interview. “By the end of the year we will start spending.”

Marchionne plans to manufacture new SUVs at the Melfi plant, which will be the first facility to be re-tooled for the new models. This is part of Fiat’s CEO plan to bring back on the track the company’s loss-making European business, which made Marchionne postpone buying more shares in Chrysler and instead focus on Fiat’s finances. The chief executive told reporters that investing in higher-margin models will help Fiat compete with premium automakers in Germany.

“Thanks to Chrysler (car platforms), we can leverage the Alfa Romeo and Maserati brands and become a nuisance to premium brand competitors,” he said.

Although Marchionne said recently that he will stop any investments in Europe for a while, his decision to unblock them was mostly due to Italian Prime Minister Mario Monti’s reforms and Italy, considered by Fiat’s CEO ‘a different Italy from the one I have seen in recent years.’