Sergio Says Fiat's Moving Out of Italy, FCA Needs Room for SUVs

Matt Posky
by Matt Posky

Fiat Chrysler CEO Sergio Marchionne plans to to retire soon, and he wants to revolutionize the company as one of his final acts. On June 1st, he intends to unveil a sweeping plan that abandons local production of the compact and super-mini cars the Fiat brand is known for so FCA can focus on larger, more upscale, models.

Fiat, the most Italian brand we can think of that isn’t Ferrari, is moving assembly out of Italy. After being emptied, those factories will be repopulated by Maserati and Jeep SUVs. If you think that’s rather bold of FCA, there’s more. There’s also a very good chance the Alfa Romeo Mito and Fiat Punto will be killed off entirely. Thanks to a decade of steadily declining sales, the Punto has transformed from an European staple to a financial liability. It’s hard to imagine the continent without it, but Axing the model admittedly makes good bit of sense.

However, if FCA keeps culling Fiat and Chrysler’s lineup out of existence, won’t it eventually have to change its name?

According to Bloomberg, the big idea is to shift production of Fiat’s affordable cars to countries paying lower wages. The automaker’s hope is that spending less on labor will offset the vehicles’ slimmer profit margins. For example, the Fiat Panda will likely move from the Pomigliano plant near Naples, Italy, to Poland (where the 500 is built). Pomigliano could then be used to build smaller Jeep vehicles with a higher price tag.

While nothing official has been said by the manufacturer, there has been talk that the 500 and Panda could be Fiat’s only survivors under Sergio’s plan. FCA wants to prioritize production of the lucrative SUV segment globally and make room for its more-profitable brands.

Is it just our imagination, or has the automotive industry collectively decided to abandon affordable cars? If Fiat isn’t going to be make small, budget-focused automobiles, there’s no telling who might be next.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Sceptic Sceptic on May 19, 2018

    All of these moves out of car production open the gate for Chinese producers. China is brimming with new ambitious car companies. After satisfying the internal demand they will export. We will see a lot of under $10K compacts in the next 5-10 years. It’s all good.

    • See 1 previous
    • Scott25 Scott25 on May 20, 2018

      @TwoBelugas Almost impossible to find any car in US at that price, or will require haggling which first time car buyers generally aren’t great at. 16k seems like a more realistic bottom end nowadays, so there would still be a big market for a 10k new car. Canada does have 10k cars but still hard to find the base trims and most people get upsold to a 20k compact anyway.

  • JDG1980 JDG1980 on May 20, 2018

    "Is it just our imagination, or has the automotive industry collectively decided to abandon affordable cars?" Today, if you want an affordable car, you buy a used car. Bottom-of-the-barrel new cars are a relic of the era when you couldn't expect a vehicle to last more than 50-75K miles before needing expensive overhauls, and they didn't even bother to put a sixth digit on the odometer. They are no longer needed in an era where all but the worst cars can make it 150K-250K miles without breaking the bank. And with more mandatory safety features every year constantly driving up the bill of materials, the economics of low-end cars become less and less tenable. The majority of buyers would rather buy an off-lease mid-trim compact CUV than a new base-model subcompact sedan or hatch at the same price.

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    • Mopar4wd Mopar4wd on May 20, 2018

      @scott25 For the lease payments to stay low there needs to be good resale or it kills profits. small car resale is plummeting and with it super cheap compact car lease deals. You can lease a mid size car for close t the same as a subcompact thanks to the resale issue, and it's getting worse everymonth.

  • Mishab Agree with you. Thanks for sharing this insightful update about the upcoming Mini Cooper models! It's fascinating to see Mini's shift towards electrification and the unique design elements they're incorporating into the new John Cooper Works edition.Speaking of Minis, if you're a Mini Cooper owner in Sharjah looking for spare parts or considering common repairs, you might find this article on 7 common Mini Cooper repairs quite useful. ( for reading it). It covers some of the typical issues Mini owners might encounter and offers valuable insights into maintaining these iconic cars.Looking forward to more updates on Mini's electrified lineup and the exciting changes they're bringing to the automotive industry
  • Redapple2 Love/lust a 110 diesel defender. Should buy one since the INEOS is gas only (and double the price). Had a lightweight in Greece. Wonder how this rides.
  • Ajla There is inventory on the ground but as pointed out it is generally high dollar trims of high-dollar models and at least around here dealers still aren't budging off their mandatory nitrogen tires and Summer weather protection packages.You aren't paying '21-'22 prices anymore but it's still a long way to go.
  • Slavuta Every electric car must come with a film about lithium mining
  • Sobhuza Trooper Drop a good, high-strung German engine in this and you'd have American flair with German repair costs!