Italian car manufacturer Fiat will relaunch production of its Alfa Romeo brand in North America by 2012, according to its chief executive, Sergio Marchionne.
He told The Financial Times that in addition to returning Alfa Romeo production to the US, the Italian industrial group is preparing to return its Iveco trucks division to the US, as well as a possible relaunch of the Fiat 500.
Fiat withdrew Alfa Romeo from the US market in 1995 when yearly sales decreased to 400. The company will return the brand to North America in 2009, a Fiat spokesman told fDi. “If the brand’s US launch is a success, we must consider local manufacturing, given the weakness of the dollar, although manufacturing would probably not start before 2012.”
The company is evaluating three ways of re-launching production in the US: either building its own factory facilities, engaging a local manufacturer under contract, or using the firm’s existing North American infrastructure. Fiat controls the world’s largest tractor and combine harvester firm, Case New Holland, headquartered in the US. Fiat says the subsidiary’s manufacturing sites could be adapted for automotive manufacturing.
Fiat will also relaunch its Iveco brand of commercial trucks, parts and diesel engines, which left the US market in 1990. Re-entry into the market will not take place as a merger or acquisition; instead the firm will attempt organic growth using Case New Holland’s existing manufacturing infrastructure, although an M&A may be possible at a later date.
However, the company’s US relaunch plans come at a time when many automotive firms are experiencing poor North American sales as consumer confidence and spending has declined with the credit crunch. Overall sales of passenger vehicles in the US were reported in March to have decreased by 12% year on year. In the same month, General Motors and Chrysler both reported a year-on-year decline in sales of 19%, Ford reported a decline of 14% and Japanese automotive manufacturer Toyota announced a decrease in US vehicle sales of 10% year on year.
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