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New Fiat 500 Helping Chrysler Ramp Up Exports

Jeeps by the boatload bound for China.

by on Jan.28, 2011

Laura Soave, head of the Fiat brand in North America, stands with the new 500 minicar.

In a move that underscores the complexity of the global auto industry,  the new Fiat 500 being launched in North America will also debut on a wider, global stage as the Chrysler Group assembly plant in Toluca, Mexico ramps up production later this year.

The facility will help Chrysler’s Italian affiliate, Fiat, deliver on its promise of boosting worldwide exports which, in turn, will allow Fiat to gain a larger stake in the U.S. maker.

During a conversation in San Diego, this week, Chrysler officials confirmed the Mexican made Fiat will not only be sold in North America but also exported to a range of markets as far-flung as Brazil and China by the end of 2011.

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The Brazil-bound 500 will be equipped with a special engine that can run on 100% ethanol or ethanol –gasoline blends, according to a senior Chrysler engineer.  Chrysler officials have until recently been reluctant to discuss the wider plans for the 500, which is scheduled to go on sale next month, as the Fiat brand returns to the U.S. for the first time in nearly 30 years.

The engines for the China-bound 500, as well as those used in the U.S. and Latin America, will come from a Chrysler plant near Detroit.

(Check out TheDetroitBureau.com’s review of the all-new Fiat 500. Click Here.)

While Fiat/Chrysler hasn’t made a formal announcement, chief executive Sergio Marchionne has already confirmed the plans for exporting vehicles from Mexico, noted Laura Soave, the executive responsible for bringing the Fiat brand back to the U.S.  Soave added Fiat/Chrysler already has sales  executives on the ground in China to handle the launch of the 500.

The 500 is already sold in 80 countries around the world and Fiat’s plans call for expanding the sales to additional markets around the world.

Meanwhile, the first boatload of the recently-redesigned Jeep Grand Cherokee exported from Detroit has reached China.

The exports to China of the new Grand Cherokee, which has earned a host of honors from the North American automotive press,  is one part of the strategy to expand  Jeep sales at home and abroad as Jeep celebrates its 70th anniversary this years, according to Chrysler officials.

“Jeep is one of the best-known brands in the world. It’s as recognizable as Coca Cola,” said Jeep brand boss Mike Manley, who noted that in many parts of the world, driving a Jeep is a status symbol, noting Chrysler has quietly sold more than 12,000 Jeep Compass  in China in the past couple of years and Chinese distributors and dealers want to get more, Manley said.

Building up Chrysler’s exports is one of a series of challenges the Obama Administration set for Fiat, as part of the U.S. market’s federally-funded 2009 bailout.  If Marchionne can meet all three – and also pay off Chrysler’s federal loans – Fiat could gain a 51% stake in the U.S. company, up from 20% following Chrysler’s emergence from Chapter 11.

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