Fiat Seeks to Spend $12 Billion to Build Italian-Made Luxury Cars
Fiat SpA (F) plans to invest as much as 9 billion euros ($12.3 billion) on new models to end its European losses in three years, with the aim of reviving nearly empty Italian factories, people close to the situation told Bloomberg. In addition to boosting the upscale Maserati and Alfa Romeo brands with new “Made in Italy” models, the carmaker will focus the Fiat line on variants of the trendy 500 subcompact and the budget-oriented Panda small car, while dropping a former best-selling car, the sources said. With the timing of Fiat’s planned merger with Chrysler (CGC) Group LLC uncertain, Sergio Marchionne, the chief executive officer of both carmakers, is under pressure to stem the Italian manufacturer’s losses in Europe. While Fiat previously announced plans to develop about 20 new models for Europe by 2016, including eight Alfa Romeos, the company has declined to comment on a revised European strategy until next April. The Fiat Punto, a compact hatchback that competes with Volkswagen AG’s Polo, will be replaced by a five-door version of the 500 subcompact. That mass-market model will be built in Poland, which pays its auto makers one-fourth the wages of Italian workers, to save costs and boost profit margins, the sources told Bloomberg.