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.