Chrysler and its Italian ally Fiat plan to team up in a European manufacturing venture that will expand the Jeep presence overseas.
Sergio Marchionne, who serves as CEO for both Chrysler and Fiat, says his company will invest $1.4 billion in the Mirafiori plant, in Turin, to permit the production of Jeep and Alfa-Romeo sport-utility vehicles.
The move could help Fiat achieve one of the critical benchmarks set by the Obama Administration as part of the Chrysler bailout last year. Fiat currently holds a 20% stake in the long-troubled American maker. Each of three key goals will boost that stake by 5%, including the requirement to boost Chrysler’s overseas sales.
But expanding cooperation between Fiat and Chrysler is critical for both companies to achieve the necessary sales volumes and economies of scale that Marchionne believes are necessary to compete in today’s global auto industry. The Fiat brand is making a comeback in the U.S., after a two-decade absence, with next month’s launch of its 500 microcar.