FCA’s Sergio Marchionne To Announce The End Of Mass-Market Car Production In Italy

Sergio Marchionne is reportedly preparing to unveil on June 1 a sweeping transformation of FCA’s production in Italy.

Marchionne’s final move as CEO of Fiat Chrysler Automobiles will see the company abandon the production of mass-market models in Italy, including the Fiat Punto and Alfa Romeo Mito, in favor of upscale models according to Bloomberg.

Citing people familiar with Marchionne’s plan, the report goes on saying that FCA will retool its plants in Turin and Pomigliano in order to produce new Maserati and Jeep SUVs while production of the Fiat Panda will move to Poland.

This change at the company’s Italian roots is part of Marchionne’s plan to shift western European production to premium cars, aiming at boosting Jeep’s global sales and aiding FCA to move from diesel to hybrid electric cars.

The plan is still not finalized and some details could still change according to the sources before the official announcement is made on June 1. Marchionne, who will retire as CEO next year, believes that there isn’t a future in making cheaper cars in high-wage European countries.

The changes in FCA’s Italian production will include the end of production for the long-standing Punto supermini model at the Melfi factory, as well as for the Alfa Romeo Mito in Mirafiori. FCA is reportedly planning to add a second Maserati SUV model there, next to the existing Levante.

Moving production of the Fiat Panda from Pomigliano to Poland will allow Fiat Chrysler to build a new ‘baby’ Jeep model there as part of the brand’s global expansion plan. FCA will also stop offering diesel engines in its small European models, and will offer instead hybrid electric powertrains.

FCA is also planning to further shrink the Fiat range to just the 500 and Panda models, with the rest of their budget models to be discontinued.

Marchionne said in an interview last January that FCA could double its profit within five years by exploiting the potential of the Jeep brand. FCA’s North American strategy has so far paid off, as the company almost halved its net industrial debt and posted wider profit margins than Ford during the first quarter of the year.

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  • haudit

    So, Italy becomes home to high end Jeeps, Alfa Romeos and Maseratis? Personally, I don’t have a problem with that, but I don’t see it generating as much production volume as the mainstream cars they’ll be replacing, so there will presumably be at least some job losses, and Italy’s famously militant unions will probably have something to say about that.

    Moving the Panda from Pomigliano back to Poland makes good sense, as I’ve never been impressed by the quality of the current Panda – it’s always given me the impression of being assembled in a more slipshod manner than its predecessor.

    Regarding the shrinking of the Fiat brand to just the Panda and the 500 – this seems like a fairly strange move, when the Fiat Tipo is busily shifting considerably more units than its immediate predecessor (the much better looking Bravo) was ever capable of. I’d suggest they hold on to the Tipo and 500X – both of which sell relatively well on a platform that was paid for a long, long time ago – and retain the 124, eventually developing a replacement on a shortened variant of Alfa Romeo’s Giorgio platform, manufactured in Italy rather than Japan. They should ditch the 500L and the Punto immediately, though.

  • Evo45

    “FCA is also planning to further shrink the Fiat range to just the 500 and Panda models, with the rest of their budget models to be discontinued.”

    Not sure if dumb plan or not since they have good sales from these rest of their models.

  • ace_9

    He just confirms that like every other manager he lives out of touch with normal world of normal people. Only a high level manager can feed people with nonsense like: “there isn’t a future in making cheaper cars in high-wage European countries”. I live in Europe, I visited several European countries and I KNOW, that cheaper cars are at least 30 % of all cars on the roads here. But only very small amount of them are from Fiat. And you know why? It’s not because people simply want something more expensive. It’s because they don’t want a poorly build, unreliable, morally and technologically few generations old car that is breaking down every other month…

  • TrevP

    This fool doesn’t seem to know anything. All this does is confirm what I always thought…Why is he CEO?!?!

    • ace_9

      Did you hear about Peter Principle? “Employees only stop being promoted once they can no longer perform effectively, and managers rise to the level of their incompetence.” Google it, it’s surprisingly true.

      • TrevP

        Wow. That is crazy.

        • ace_9

          I have quite a lot of experience with managers and I am also amazed… By how much relevant and true it is 😀

    • Tumbi Mtika

      It’s almost over…

  • Harry Nimmergut

    This reminds me of another auto head that’s a doofus. Come on Mary Barra, join the party!

  • Six Thousand Times

    Either way, Serge, FIAT really, really needs a replacement for either the 500 or the Punto.

  • LeStori

    Not quite. the Alfa Romeo Mito, is getting the can. Not surprising. It was a rebodied FIAT.A stop gap measure. Decent enough, but does not fit in the new Alfa Romeo line up. It is essentially a mass market vehicle and Alfa Romeo will not be aimed at the masss market moving forward.

  • LeStori

    Do you think Alfa Romeo is a mass a market manufacturer? Even 400 000 vehicles, a figure bandied around, would not make it mass market. BMW made something like 2 million vehcles plus in 2017. So Alfa Romeo is boutique. And Giulia exclusive! BMW is mass market.

  • charlie bear

    FCA is in a suicidal mission, gambling with the future of the company is not good. I fear the group will be torn in a small entities, and we can see the likes of Jeep, Ram, Dodge, Ferrari and Maserati sold to bigger companies and the Fiat, Chrysler, Lancia and to a miner degree Alfa Romeo disappearing for good. Hope I am wrong.

  • LeStori

    Got to laugh at many of the comments. Polands labour rates are about a third of Italy. Moving mass production to Poland makes sense. Retaining premium in Italy and expanding Jeep also makes sense. Might keep the unions happy. Abandoning the FIAT Alfa Romeo called the Mito also makes sense. It is a FIAT with a new dress. Hardly a premium Alfa Romeo. It was only ever a stop gap measure. It will be interesting to see what comes out in the June announcements. As for what might or not happen to the down market FIAT brand. We will see…

  • TrevP

    1. Ford will still produce sedans in the US until 2021 if you read up on it. Here in the US we also have a brand called Lincoln, which will continue to produce sedans. In case you didn’t know, Ford and Lincoln are like Chevy to Cadillac, or Toyota to Lexus.
    2. The reason I think he is a fool is because FCA happens to have Dodge and Chrysler under its belt. What bothers me is that the US Dodge and Chrysler line up is extremely old and in need of replacement vehicles yet nothing has been mentioned. I know we still have yet to hear about Mr. Marchionne’s 5 year plan next month, but with new cars that look like the same ones 6-10 years old, I feel nothing is being done about it. That is what I mean when I say and think that he is a fool.
    3. Yes, other car manufacture CEO’s are fools as well. Look at VW and the diesel scam. Hyundai is continually updating their line up (at least in the US), PSA hasn’t even come to the US yet so I can’t say and Renault will probably never come to the US so I can’t elaborate more on that brand or CEO either. Does that answer all of your questions Michelin?

    P.S. You should use the spell/grammar check next time.

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