Fiat confirms 2012 net profit, announces investment plans

CEO Marchionne says company to focus on high end of market

Fiat confirms 2012 net profit, announces investment plans

Melfi, December 20 - Fiat SpA Chief Executive Sergio Marchionne on Thursday confirmed the company would end the year with some 1.2 billion euros in net profits and presented a new investment plan for a key factory in Melfi, near Naples. Speaking to reporters at an event attended also by Fiat Chairman John Elkann and Italian Premier Mario Monti, among others, Marchionne said the company - sustained by profits from its U.S. unit Chrysler and from Brazil - would reach ''break even'' in its loss-making Italian and European operations in ''three to four years.'' The company is making major investments in the Melfi plant, where it has produced some 5.5 million cars - including the Lancia Ypsilon and Fiat Punto compacts - and where it is currently producing the third generation Punto. New investments in Melfi - the first of a series that will include other Italian factories, Marchionne said - will lead to the production of two, new mini-SUVs, bearing the Fiat and Jeep brands. Jeep is a wholly-owned brand of Chrysler. Speaking after Marchionne, Monti said: ''I hope that investments for other Fiat factories in Italy will take place soon. Marchionne's words about this being the first of a long series of investments (in Italy) are well impressed in my mind.'' The Fiat chief executive, who has been battling poor productivity and weak sales in Fiat's home market, said the decision to make further investments in Italy was courageous. ''We chose the road of courage in a moment of crisis,'' Marchionne said of the company's plans to increase investments in Melfi, opened in 1993 and where the company employs some 5,550 workers. The company is taking risks by attempting to increase its returns by investing in higher value cars, moving away from its core business of compact, utility cars like the Punto and Panda. ''We have chosen to move away from the mass market and go and compete in the high end of the market. We have all the possibilities and the means to do it,'' Marchionne said referring to Fiat's ownership of high-end brands like Alfa Romeo, Maserati and Ferrari. Marchionne has said his plans for re-launching the Fiat group include massive investments in Maserati and Alfa Romeo, which is due to make a return to the U.S. market in 2014.

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