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Italian Fiat Plants May Build Chrysler And Jeep Models For U.S. Market: Report

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Sergio Marchionne

Sergio Marchionne

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Fiat-Chrysler CEO Sergio Marchionne met with Italian Prime Minister Mario Monti over the weekend to address concerns Fiat might be closing one or more plants in Italy due to its shrinking market share and excess capacity. A joint statement after the meeting said Fiat would revise its plans by building more cars in Italy for export outside of Europe, which is seeing the lowest level of new car sales in close to 40 years.

Many of Fiat’s plants in Italy are running at 50 percent or lower than their optimal capacity, and with many, including Marchionne, seeing no rebound in the European new car market until at least 2015, either these plants start building cars for export or they cease to operate.

Though no details of Fiat’s revised plans have been revealed, a source close to the matter has revealed to Reuters that Chrysler and Jeep models destined for sale in the U.S. could end up being built at the Italian Fiat plants.

The source also said the Italian government is looking at fiscal and other incentives to help the export program, however, no mention was made of which models from the Jeep and Chrysler lineups would be built in Italy.

With the new car market in the U.S. starting to recover, and some forecasters predicting it could exceed 14 million sales next year, Chrysler may need more capacity. Its North American plants are reportedly running at full capacity already.

Fiat was expected to outline a future strategy plan on October 30 that was believed to contain a focus on emerging markets, in particular Brazil. The same source said that Fiat will no longer release the strategy.

Fiat is on track to lose 700 million euros (approximately $903 million) in Europe this year, Marchionne said.

Stay tuned for an update.
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