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Fiat Could Close Two Plants if U.S. Return Fails

Marchionne confirms Alfa still coming to the States.

by on Feb.27, 2012

Fiat's revival in the U.S. -- as well as its operations in Italy -- could depend on the reception Americans give to the Alfa Romeo 4C.

Despite a slow start, Fiat is still betting it can stage a successful return to the U.S. market – or else, warns CEO Sergio Marchionne.  The alternative would force the closure of two of the maker’s Italian assembly plants.

The good news for Fiat is that most of its plants outside Europe – and those operated by its American partner Chrysler – are operating at full speed struggling to keep up with demand as the global economy recovers. The problem is Europe, where a weak economy has depressed the automotive market and the only way to justify keeping Fiat’s five remaining plants in Italy open is to build up exports.

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But demand in the U.S. for the maker’s little Fiat 500 sedan barely reached half the initial 50,000-unit target last year and, during a media roundtable last month, Marchionne said he doesn’t expect to see it push much higher than 30,000 in North American this year.  But some analysts think even that will be a stretch and warn Fiat’s attempt to rebuild its U.S. distribution network will fail.

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