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Fiat eyeing new Mexican plant

 
3 1,261 views May 8, 2008
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Fiat eyeing new Mexican plant

Fiat eyeing new Mexican plant

The spreading exchange rate differential between the strengthening euro and weakening U.S. dollar means importing European manufactured models to North America is now significantly more expensive than just a few years ago. Established import brands are already finding it tough so imagine the challenge Alfa Romeo will have on its hands with trying to juggle launching the brand and dealing with unfavorable exchange rates.

Sources have revealed Fiat will likely build a new plant in Mexico to supply cars to both North and South America. The plant would serve as a base for the local of production of both Alfa Romeo and Fiat cars, to help with Alfa’s re-launch in North America next year as well as fill demand for highly sought-after Fat models in South America, reports Automotive News.

Fiats has a number of options including buying a shuttered former Detroit 3 factory or expand one of its Case New Holland agricultural machinery plants of which there are 11 in North America. The final decision is expected by the end of the month.



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Comments (3)

  1. By chris Posted: 5/8/2008 7:36pm PDT

    ....so THATS the tying link between Ford and Fiat... New Holland. interesting.
     
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  2. By HECTOR Posted: 5/9/2008 5:44am PDT

    Anyone with common sense knows that sooner or later the exchange imbalance will come to an end and the dollar will once again be strong. So putting a plant here in the US is not necessarily an intelligent move on the part of European manufacturers, specially those that don't have an established presence like Alfa Romeo.

    On the other hand... A plant in Mexico? Really? Doesn't Alfa have enough problems with quality, actual or perceived?
     
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  3. By chris Posted: 5/9/2008 9:04am PDT

    hector; this current economic crisis has been called the worst economic situation since the depression. there's a lot of instabilities about the american financial system and there's no telling if the american dollar will ever be as strong as it was. there's a lot of factors but mostly the problem is that no one owns anything in the USA. the banks do. but the banks need your money to stay alive. another problem is that china has half a trillion dollars of the US treasury. there is a lot of foreign ownership in the USA. It's a pivotal time right now for the financial system. I think there's a lot of change that needs to happen, and this is enough of a scare to make it happen.. but it could go either way right now. after reading about global finance, the american dollar is so valuable and stable because every commodity is exchanged in it. it is the standard reference. but if that stability is in jeopardy, you could see the London SE become the world's financial center, at which time the american economy is nearly certain to fall at least a little.

    but that's not alfa or fiats problem, like you said. they're trying to establish presence in a market that is declining, and in recession right now. the exchange rates are extremely unfavorable right now so the only way they can get in is by building domestic. that requires much more investment than just exporting vehicles.. and in the end, does fiat or alfa have high enough real or perceived quality to make it in the USA?

    I'd rather buy any import (except for hyundai) over fiat or alfa. and even when it comes to hyundai, i could get so much more car for so much less money.

    alfa's only chance here is to import the 8C and charge rediculous amounts for it. people will buy anything if you make very few of them and sell them for a lot of money. seems to me the only way alfa will make any money here.
     
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