Fiat Chrysler plans to invest over 5 billion euros ($5.7 billion) on new models and engines in Italy for the next three years to try to make better use of factories and increase jobs and margins.
The plans are meant to deliver on a strategy outlined by FCA’s late CEO Sergio Marchionne in June, in which he made a commitment to continue converting Italian plants to produce higher margin Alfa Romeos, Jeeps and Maseratis and hybrid and electric versions of its vehicles to safeguard jobs and lift profitability.
The company will release an overall of 13 new models or restylings of present models in the 2019-2021 period and make sure that all plants in Italy reach full employment, FCA’s new European head Pietro Gorlier informed unions and journalists in Fiat’s hometown of Turin on Thursday.
FCA appointed Gorlier in October to tackle a region where profitability is below that of competitors, thousands of employees are on temporary layoff schemes, and some plants run way below capacity.
FCA’s operating margin in Europe recovered to 3.2 percent last year, but this compares with competing automaker PSA Group’s global automotive margin of 7.3 percent. FCA expects its margin to increase to between 5 and 7 percent by 2022.
A big part of the investments in Italy will concentrate on the development of electric and hybrid models and the creation of general platforms that can be used to develop various vehicles to increase efficiencies and flexibility, he added.
“These are investments that are capable of being implemented and kick off tomorrow morning,” Gorlier stated, stressing that extra plans for Italy and other plants in Europe – in Poland, Serbia and Turkey – would be declared at a later stage.
A new Fiat 500 electric model are going to be produced at FCA’s Mirafiori plant in Turin, while its plant located in Pomigliano, southern Italy, will produce a mild-hybrid version of its popular Fiat Panda hatchback.