Fiat is considering a second car factory in China to expand its capacity in the world’s largest car market as the carmaker cuts investment in Europe.

“In the future, we might have another manufacturing site, somewhere in the south,” Jack Cheng, general manager of Fiat’s joint venture in China with Guangzhou Automobile Group, was quoted as saying by Bloomberg.

In order to offset losses in Europe, Fiat CEO Sergio Marchionne wants to boost sales in China. The Italian carmaker is reducing spending in Europe this year by 500 million euros to conserve cash, as demand in Europe is expected to fall for a fifth consecutive year.

In the first half of this year, Fiat’s mass-market brands – Fiat, Alfa Romeo and Lancia – lost 354 million euros in Europe. Marchionne has said he will shut a second factory in Italy unless he finds a way to export cars to the United States. Fiat will reveal a plan to curb losses in Europe at the end of October.

Fiat started sales of its first China-made vehicle, the Viaggio compact sedan, on September 16. the carmaker aims to release one new model a year in China and also to introduce an SUV in 2014, according to the general manager of Guangzhou Fiat JV.


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