Fiat announced it will invest around 1 billion euro in its Melfi plant to manufacture two new car models.
Fiat’s CEO Sergio Marchionne said that the automaker will invest 1 billion euro ($1.33 billion) to manufacture two new SUV models at its Melfi plant in Italy beginning with 2014. This is part of the company’s plan to cut loss in Europe and boost capacity usage.
“It is not a hazardous strategy,” Chief Executive Officer Sergio Marchionne said today at the Melfi plant where the models will be assembled. “We decided to shift away from mass carmaking and compete in the upscale market.”
In order to turn around Fiat’s operations in Europe, Marchionne plans to sell the more expensive models. By the end of this year the automaker expects loses of 700 million euro and it has already reduced the profit target for 2014 by 31% to 5.2 billion euro. Marchionne plans to introduce 19 new models manufactured in Italy through 2016, among which 9 Alfa Romeo models and 6 Maseratis.
One of the SUVs to be produced at the Melfi plant will be a Fiat model and the other a Jeep model. Currently, Marchionne is negotiating tax breaks with Prime Minister Mario Monti’s cabinet to make the vehicles’ price more competitive.