Fiat Chrysler to spend $4B in Brazil to regain lost share

As part of a $4 billion strategy to reclaim lost market share in Latin America's biggest economy, Fiat Chrysler Automobiles is bringing new models to Brazil.

Fiat Chrysler to spend $4B in Brazil to regain lost share

The FCA raised its investment plan for Latin America by 2 billion reais by 2024, although it extended the outlay deadline first announced in June by one year. Manley informed that the expenditure would go towards increasing annual capacity at a Pernambuco Jeep plant to 350,000 from 250,000 units and building a new plant to produce more efficient turbo engines. Fiat Chrysler is planning 15 new, refreshed, or exclusive Fiat series models, and 10 for their Jeep and Ram brands by 2024.

Manley stated that he wants to make sure that the Fiat brand remains very powerful in the marketplace in Brazil. Fiat brand is a vital part of their business. Latin America is crucial to efforts by Manley to grow the business of Fiat Chrysler globally. It is the only other region where the company made money in the first quarter besides North America, resulting in adjusted earnings before interest and taxes amounting to 105 million euros ($117 million).

Over the era, the profit margin of the automaker in Latin America was 5.4 percent, reflecting the region's near-double-digit profitability over the five years to 2022. In 1976, Fiat opened its first plant in Brazil, and through 2015, the Fiat brand-led sales in the country for 12 years. That ended after the company merged with Chrysler and started pouring resources into Jeep to make it more of a global brand, including beginning the Compass and Renegade models at local production.

Although demand for Jeep's higher-margin SUVs has increased its Brazilian market share rating from virtually zero four years ago to 4.8 percent, Fiat's budget car brand has sunk to third place. Fiat became Brazil's first automaker to build manufacturing facilities outside the industrial center of the state of Sao Paulo, opening its plant in Betim, Minas Gerais, central state, in 1976. The inauguration was attended by Giovanni Agnelli, grandson of the firm's founder and Chairman John Elkann's grandfather.

Today the factory produces engines, transmissions, and eight Fiat models, ranging from the super-compact Mobi to a small Doblo truck. It has 800,000 cars and 1,1 million engines and transmissions per annum. The Pernambuco Jeep assembly plant, in northeastern Brazil, hires 5,000 people to produce the Jeep Renegade and Compass. Brazil is one of the few out - of-Europe regions where the Fiat brand has gained broad popularity. In the U.S., where cheap gas prices and a love affair with trucks and SUVs left their 500 compact car out of fashion, it has gone withering away.

Starting in 2020, the Betim plant Betim plant will manufacture three new models, including two new Fiat brand SUVs. By then, Fiat will have to compete with Volkswagen, and even with its brand of Jeep, Felipe Munoz-Vieira, a Turin-based analyst with Jato Dynamics. Brazil is one of the Fiat brand's few remaining vital markets, but it is not one of the brands considered by customers seeking an SUV. Indeed, these two new Fiat SUVs will help the brand reclaim market share, but by the time they arrive, Volkswagen and Jeep will be well placed in the segment.