May9

Although Fiat was originally eying a U.S. location for an Alfa Romeo production facility, the Italian automaker has now turned its attention to south of the border. Alfa will make its return to the U.S. market in late 2009 and therefore needs a plant

in North America to avoid losses due to an unfavorable exchange rate. However, strong demand from South America has Fiat reconsidering the plant's U.S. location.

According to Automotive News, Fiat is considering a plant in Mexico that would be able to supply North and South America. Demand in South America is out pacing Fiat's supply, so the automaker needs to up its production capacity in that part of the world.

Mexico's central location would allow Fiat to use a plant built there to supply both North and South America.

"Where that [South American] capacity will come from is not yet decided. I think that it may be part of a North American solution, especially in terms of the introduction of the Alfa brand", Fiat CEO Sergio Marchionne told Automotive News.

Fiat announced earlier this year that it was looking to work with one of the three big North American car companies to share their production lines or move into one of the companies' shuttered factories. Another possibility is that Fiat could convert one or more of its 11 North American Case New Holland plants to produce its vehicles.

Fiat is expected to announce a location by the end of May.

Posted on May 9th, 2008 by livgon
Filed under: Car News For Enthusiasts