By on August 31, 2011

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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8 Comments on “Will Rising Euro Push Alfa/Jeep Compact CUV Production To Toledo?...”

  • avatar

    Image-wise, producing Jeeps in Italy makes about as much sense as producing Ferraris in Detroit. One thing Jeep has going for it is a worldwide brand recognition that’s positive for a good fraction of the population.

  • avatar

    To me, it makes far more economic sense to build subcompacts in Europe (where most of them will be sold) then it does to build CUV’s (whose main target market is undoubtedly America). Of course, I am biased and I would like to see more jobs added in America, especially in a UAW area, but there are more than enough valid economic arguments as to why it should be built here and not overseas.

  • avatar

    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.

  • avatar

    That is not a rising euro but a sagging dollar.

    • 0 avatar
      Hildy Johnson

      Beat me to it. In fact, they are both sagging, the dollar is just sagging faster.

      • 0 avatar

        Pretty much all world currencies are sagging except for the yen, and that is pretty much destroying Japanese industry right now. Maybe Sergio has seen that the writing is on the wall for the Eurozone and that’s factoring in to his plans.

  • avatar

    Go Mudhens!

  • avatar

    Is this the same Toledo plant that AMC built and had big-time union problems ?

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