Report: FCA Will Drop Small-Car Production in Italy

Fiat Chrysler Automobiles NV reportedly plans to phase out Italian production of its low-priced Mito and Punto models in a move to shift its product mix upmarket.

CEO Sergio Marchionne will unveil the strategy on June 1, sources tell Bloomberg News. Bloomberg says the realignment is part of his effort to position Fiat for sustainable profitability in a shifting global marketplace.

Marchionne, 65, is scheduled to retire as CEO in 2019. He began signaling in 2014 his desire to shift FCA’s product mix to a more profitable models. Earlier this year he declared that the company could double its profit in five years by rolling out more Jeep models.

Marchionne already had realigned FCA’s North American operations around pickup trucks and SUVs. Under his new plan, the company’s only small cars would be the Fiat 500 and Panda city car, neither of which will be manufactured in Italy.

The 500 is being produced in Tychy, Poland, and Toluca, Mexico. Panda production would move to Poland from FCA’s factory in Pomigliano, which will add a small Jeep SUV model. Punto minicar production would end at FCA’s plant in Melfi, according to Bloomberg’s sources. It isn’t clear what new models that facility might get.

FCA’s historic Mirafiori plant in Turin is to drop production of the Alfa Romeo MiTo three-door supermini and add a second SUV to the Maserati Levante currently built there, according to the plan.

Bloomberg says the new plan also aims to phase out diesels and replace them with gasoline-electric hybrid powertrains.