The Italian car maker Fiat has announced plans to increase its car production to up to one million vehicles over the next three years.
The Turin-based company will restructure its industrial network in order to increase production from its current 650,000 units per year to between 800,000 and one million. The plans were announced by Fiat CEO Sergio Marchionne at a meeting with government and union officials which took place in Rome on Tuesday.
Fiat will also spend Ôé¼8 billion in investments and R&D over the next two years. Two-thirds of that investment will be in Italy.
However, it will proceed with controversial plans to shut down production at Termini Imerese in Sicily, the smallest of its five Italian factories.
Costs at the plant are too high due to lack of infrastructure in the area. Cars made at the factory cost up to Ôé¼1,000 more than those at other plants, the company said.
Termini Imerese will shut down at the end of 2011. Fiat is open to proposals from authorities on what to do with the plant next, it said. The Government has so far been critical of FiatÔÇÖs plans to close the plant and have insisted that the building is preserved after production ceases.
Political and union leaders have been demanding that the plant stay in operation, given its importance to the local economy.
There were reports that the production of the Fiat Panda could be transferred to the companyÔÇÖs Pomigliano factory in southern Italy.
Fiat is also planning to maximise the opportunities arising from its new alliance with the US brand Chrysler. In June it took a 20 per cent stake in Chrysler after it emerged from bankruptcy protection and is steering the brandÔÇÖs reorganisation.
Over the next few years a range of new Fiat and Lancia models based on Chrysler car, sport-utility vehicle and crossover platforms will be launched.
The first model, a sport-utility vehicle, will be available in 2010.
Five further models are in the pipeline for the next few years, including a Fiat brand crossover, and four models for the Lancia brand, including a sedan and a convertible.
A total of 17 new models and 13 upgraded versions of existing models will be launched in 2010 and 2011, Fiat said.
ItalyÔÇÖs largest car maker, Fiat is ranked sixth-largest in the world and employs over 200,000 people.
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