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

Matt Posky
by Matt Posky
sergio says fiats moving out of italy fca needs room for suvs

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.

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6 of 42 comments
  • 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.

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  • Conundrum Three cylinder Ford Escapes, Chevy whatever it is that competes, and now the Rogue. Great, ain't it? Toyota'll be next with a de-tuned GR Corolla/Yaris powerplant. It's your life getting better and better, yes indeed. A piston costs money, you know.The Rogue and Altima used to have the zero graviy foam front seats. Comfy, but the new Rogue dumps that advance. Costs money. And that color-co-ordinated gray interior, my, ain't it luvverly? Ten years after they perfected it in the first Versa to appeal to the terminally depressed, it graduates to the Rogue.There's nothing decent to buy on the market for normal money. Not a damn thing interests me at all.