Fiat Considers Mexico Production for both South and North American Markets
If you’re Fiat and you very much want to get back into the North American market with your Fiat and Alfa Romeo brands by late 2009, and you know bringing the cars over from Europe is not sustainable from a profit perspective, what do you do? What if you also have a red-hot existing market in South America where you need more production?
How about building a plant somewhere in the middle of the two continents? Say, somewhere like Mexico?
Good idea, right? Well, Fiat thinks so, too.
According to an article today in Automotive News Europe, Fiat is looking hard at Mexico as a location for a large plant that will supply cars to both North American and South American markets.
Fiat Group and Fiat Group Automobiles CEO Sergio Marchionne said last month that the company needs additional production capacity for the growing South American market.
“Where that capacity will come from is not yet decided. I think that it may be part of a North American solution, especially in terms of the introduction of the Alfa brand”, Marchionne said, according to the Automotive News Europe article.
As we reported earlier, Fiat is scouting various locations in the United States for a production site for Alfa Romeo. They have been pursuing a dual-track strategy regarding a U.S. production site so far.
The first choice is to buy a factory previously shut down by one of the Big 3. It is a buyer’s market, to say the least.
The second choice is for Fiat to expand one of the eleven Case New Holland plants that Fiat owns here in the United States. Fiat is holding preliminary talks with the different state governments in the states where the Case New Holland plants are regarding incentives and tax abatements in order to get itself the best deal.
The idea is for production to start in 2011, or 2012 at the latest. Annual production is forecasted to be 150,000 units annually, with some of the production slated to go to Europe. The proposed production site in Mexico is not projected to replace U.S. production, but rather, supplement it at this point. Of course, that can also change in the run-up to actual production decisions.
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