Fiat will restart production of the Siena model at its plant in Córdoba, Argentina in January 2008. The initial volume of 50,000 cars a year will demand investments of US$60 million and will generate 3,000 new employment positions.

The production of engines, transmissions and other mechanical components are another part of the project that means the full reactivation of that factory will go ahead. This news follows last February's announcement by Fiat of an agreement with India's biggest automaker Tata to produce a medium sized pick-up in the Argentina by the end of 2008. Of the 3,000 new jobs created from this investment, 1,000 will be located at the Córdoba plant, with the other 2,000 coming from Fiat’s suppliers as a part of an ambitious program which aims to reach an index of 50 percent of production components being made in Argentina. This index should arrive at 90 percent if it considers the suppliers which are located in Mercosul (a regional trade agreement between Brazil, Uruguay, Paraguay and Argentina).

The decision is part of Fiat’s strategy that foresees the launch of new products on the Latin American market. Last Monday (28/5), Fiat announced a new program to hire 1,700 new employees for its factory in Betim, Brazil. In February Fiat started a third shift of its car production at the giant plant and it was necessary to increased the numbers of its labour force by 1,200, which means that since the beginning of the year Fiat has hired more 2,900 employees for its Brazilian plant, and increased its capacity of production by 10 percent.

"These investments are due to the increase in automotive demand throughout the whole of Latin America, and these figures are estimated at more than 4.6 million units a year up to 2010. The increase of production, taking into consideration the manufacturing capacity already installed in Brazil, means that the Córdoba plant will produce vehicles again," said the CEO for Latin America’s Fiat Group division, Cledorvino Belini.
 

The modern factory at Córdoba is located on the site where Fiat first began its industrial activities in Argentina during the fifties. The new plant was opened in December of 1996 with an investment of U$S600 million to begin the Fiat Siena's production, destined for the internal market and also to other markets in Latin America, particularly in Brazil.

In 2002, production was interrupted due to changes in the trade agreement amongst the countries of the Mercosul agreement and also because of Argentina’s economic crises, and ever since has Fiat been undertaking a major process of restructuring its factory in Argentina to adapt to these new situations of the market, focusing in the assembling of the 1.7 diesel and 1.6 16v gasoline engines for export. An agreement in May 2006 with PSA (Peugeot Citroen) to produce gearboxes for the French car manufacturing group was another important stage in this restructuring strategy as the contract establishes production of 140,000 units a year for a period of 10 years.

The sum of US$60 million is to be invested in restarting production of the Siena model and this increases the total amount now being invested by Fiat in Argentina up to US$190 million, with U$S80 million being spent on the project for the medium sized pick-up, and US$50 million going towards the start up of production of engines, transmissions and other mechanical components. The Córdoba plant has the capacity to produce 160,000 cars, 180,000 engines and 260,000 gearboxes a year, and it is set to become one of the main production hubs of the automobile industry in Latin American.

by Claudio Perlini