Chrysler shuts Sterling Heights plant for 200 production, FCA forecasts €8bn capex
Chrysler will halt its Sterling Heights plant for 30 days to retool for the new 200 sedan, as Fiat Chrysler Automobiles projects €8 billion in group capital expenditure for 2014.
Chrysler will close its Sterling Heights, Michigan, assembly plant for 30 days to prepare for production of the next-generation Chrysler 200. The shutdown, announced by CEO Sergio Marchionne, is part of the company’s plan to re-enter the competitive US midsize sedan segment with a new model expected to reach showrooms near the end of the first quarter of 2014.
Marchionne said the Sterling Heights closure will allow for necessary upgrades to build the new 200, which is central to Chrysler’s efforts to regain ground in the midsize segment. Chrysler is aiming to improve its market share with the updated model, following a period of declining sales and strong competition from established rivals.
No new Ram plant planned
Marchionne also addressed production capacity for the Ram pickup. He said output could be increased by 15 to 20 percent without the need for a new plant in the US or Mexico. According to Marchionne, there are no plans to build another Ram truck plant, indicating that existing facilities can handle projected demand through efficiency improvements and incremental expansion.
Fiat Chrysler Automobiles sets 2014 capex target
Fiat and Chrysler, now operating under the merged Fiat Chrysler Automobiles (FCA) name, expect group capital expenditure for 2014 to reach around €8 billion. Chief Financial Officer Richard Palmer said this figure is roughly €500 million higher than in 2013, reflecting increased investment in new products and plant upgrades. The guidance was given during a conference call following the release of full-year 2013 and fourth-quarter financial results.
The merged company, Fiat Chrysler Automobiles, is continuing to integrate operations and invest in its North American and European businesses. The Chrysler 200 launch is one of several product initiatives scheduled for 2014, with the group’s spending plans reflecting the need to support these introductions alongside ongoing plant modernisation.
Sterling Heights retooling and market context
The Sterling Heights plant has produced the outgoing 200 and previously built the Dodge Avenger. The retooling will prepare the factory for the new 200, which is positioned as a crucial product for FCA’s US recovery. The midsize sedan segment remains one of the most contested in the US market, with competitors such as the Toyota Camry and Honda Accord dominating sales. FCA’s investment in the plant and the new 200 model is aimed at improving the group’s standing in this segment.
For context on the 200’s later production and market fate, see Fiat Chrysler extends Chrysler 200 plant shutdown as US sedan sales slide.
