When Fiat S.p.A. acquired a controlling stake in Chrysler earlier this year, instantaneous criticism arose about the possibility of the Italian automaker moving production overseas. Those criticisms may now have some validity as Sergio Marchionne, CEO of Fiat and Chrysler, is exploring the possibility of building Chrysler models in Italy. The vehicles assembled in Italy would then be exported back to North America in an attempt to kickstart idled production space—and thus sales—in Europe again.
To make this a possibility, Marchionne is asking the Italian government to cut back on the corporate tax rate that goes with vehicles being exported from Italy. If the government rules in Marchionne’s favor, it will give Fiat and Chrysler a leg up to build the vehicles without the extra financial burden. Both sides are still in discussions, but it’s believed an agreement could be finalized as soon as the end of this month. It’s very possible Marchionne could announce his intentions when he gives an update to the market about Fiat’s upcoming goals.
The decision to expand Chrysler production into Europe with the intentions of exporting it back to where the automaker was conceived comes at an interesting time. Fiat has already suspended any investments in Italy and overall spending in Europe by $655 million. The Italian automaker has also delayed introducing new models in Europe as it braces for a staggering loss of around $912 million in the European market. It’s estimated that the car market in Europe will see its greatest decline in 19 years.
Besides the aforementioned reasons why Fiat is seeking to move Chrysler production into Italy, it also aspires to become a bigger player in the export market. Marchionne has already met with a working group set up by the Italian Economic Development Ministry to explore the export market further. Specifically, a Chrysler model that may be built overseas and exported back to North America is likely to include the Dodge Dart. If Marchionne gets his way, the Dart would be built at Fiat’s Cassino facility right outside Rome. This same facility already builds the Alfa Romeo Giulietta, which shares similar platforms as the Dart. There’s also a possibility that if Chrysler production is moved into Europe, Fiat’s Mirafiori facility in Turin may get a healthy investment.
What say you? Should Fiat move Chrysler production into Europe for export back into North America? Tell us what you think in the comment section below.
Source: The Detroit News