Fiat Punto to Be Axed, $13.2 Billion Spent On 20 New Models Over Next 3 Years

Fiat Punto, not long for this world.

Sources tell Bloomberg News that Fiat Spa will spend as much as 9 billion euros ($12 billion) over the next three years developing new models for for the European market. The Italian automaker hopes the strategy will end losses on the continent and restore drastically underutilized Italian factories to profitability. Many of the new models will be based on either the Fiat 500 subcompact or the small, low cost Panda. A five door version of the 500 will replace the Punto. The Punto, last restyled in 2005, has long been a fixture in Fiat showrooms and as recently as 2007 it accounted for almost a third of the Fiat brand’s sales in Europe.

Though Fiat wants to use its Italian factories better, the Punto’s replacement will be built in Poland to save on costs. Sergio Marchionne believes that “made in Italy” works with upscale brands like Maserati and Alfa Romeo. The upcoming Maserati Levante SUV will be made in Fiat’s Mirafiori factory.

Not able to access the profits that Chrysler is banking because it’s not wholly owned by Fiat yet, Marchionne must find a way to staunch the parent brand’s bleeding red ink in Europe. Fiat has previously announced that it hopes to develop about 20 new models for Europe by 2016, including eight Alfa Romeos. Some of those cars are a 500 based SUV along with Italian made Jeeps to be introduced alongside the open version of Alfa’s 4C sports car.

Fiat has lost market share in Europe for the past four years, with deliveries dropping 47% over that period and market share going form 9.3% to 6.2%. The Italian automaker has had almost 2 billion euros in operating losses since 2011, including over 300 million euros in loses for the first three quarters of 2013.

Many of Fiat’s 30,700 production workers in Italy have been furloughed this year, most of them for more than five months.