Fiat Chrysler Automobiles’s CEO expects its new plant in Brazil will boost profitability there by 2017 after 2013 profits were hit by a cut to subsidies and currency effects.
“I’m absolutely convinced that by 2017, which will be the first year of full production at the Pernambuco plant, we will return to making double digit margins in Brazil,” Sergio Marchionne told Reuters at the Geneva show. He did not say whether the margins referred to profit or sales.
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The report noted that Marchionne has said the Pernambuco plant, which will open next year, will produce models that better match market demand and will build the small Jeep Renegade – launched in Geneva – and other models. Production of the Renegade has already started at a plant in Italy.
Reuters’ report noted that Brazil used to account for about one fifth of Fiat profit, helping to offset losses in Europe, but an end to car sales incentives, higher input costs and currency effects have weighed on profitability in the region.
(See this May 2013 report from just-auto’s Brazil correspondent for more details of the Pernambuco plant and future Brazilian models)
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