Will Rising Euro Push Alfa/Jeep Compact CUV Production To Toledo?
Bloomberg reports that Fiat is considering moving production of planned Alfa/Jeep-branded compact CUVs from its Italian Mirafiori plant to the US, as a rising Euro forces tough production choices. Production of some 280,000 units per year were planned to start at Mirafiori in late 2012, but Fiat may now build an as-yet unannounced subcompact there instead. According to Bloomberg’s reporting, Fiat/Chrysler CEO Sergio
Marchionne, while confirming his commitment to invest at the Turin facility, told Piedmont Region President Roberto Cota Aug. 29 that he may change the production plans for the plant.
“Fiat is evaluating which model it will build at Mirafiori,” Cota said after meeting the CEO.
Fiat’s first-half volume in the European market is down 13%, and its market share has fallen from 8.1% to 7.2%, forcing the firm to think hard about its product mix and production plans. A city car would be sold primarily in Europe, and since the Euro as risen 9% since last November when Fiat said it would build Compact CUVs at Mirafiori, it now makes more sense to build global/US-market products somewhere other than Europe. US production would be a huge boon to the reintroduction of the Alfa brand to the US market ( led by the new C-CUV), as it would keep prices and profit margins far more competitive.
There’s no indication as yet of where Chrysler could build the Alfa/Jeep Q5/Forester-fighters, but Toledo North seems like the most likely candidate. Not only is the Jeep Liberty (predecessor to the new Fiat-derived Jeep C-CUV) already built there, but Chrysler is already sniffing out incentives to expand to 327,000 units per year.
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Fiat considers a lot, in order to whip the local unions into shape and accept something that management deems important. The union has lost much leverage since Fiat developed a pretty good global footprint in developing and 2nd world locations, and with Chrysler it picked-up a wide footprint in a location with a large economy seemingly backing itself into old-style 2nd world currency "strength". Assuming a single production location: If economic and currency trends continue, it may just be cheaper to produce in N.A. and ship back to Europe.
That is not a rising euro but a sagging dollar.
Go Mudhens!
Is this the same Toledo plant that AMC built and had big-time union problems ?