A ceremony has been held to mark the relaunch of Fiat’s Argentinean car manufacturing plant in the Córdoba region which saw the announcement of an investment of US$300 million to be allocated to a new engine.

In front of an audience of more than 250 specialised journalists, the CEO of Fiat Auto Argentina, Cristiano Rattazzi, confirmed that the additional US$300 million investment will be used for the production of the new 1.9-litre 16v 'dual fuel' engine. This engine has been developed from the long-running but now discontinued European market's 'Torque' unit.

This new 1.9 16v power unit will power the new Linea 3-box saloon, the next model which is set to be launched by Fiat Automóveis in South America; annual production of this car, which is already manufactured in Turkey, will be of 50,000 units. The Linea will be rolled out onto the four new car markets that comprise the Mercosul economic area (Brazil, Uruguay, Paraguay and Argentina) as well as being exported to China. The investment will also include the production of transmission systems to be used by commercial vehicles from Fiat, Peugeot and Citroën. The transmission production will be targeted at 140,000 units per year.

The other news relayed by the local media, but still not confirmed by Fiat, is the possible production at Córdoba of the new Palio (2008) model, which has similar styling as also now applied to the Siena (saloon) and Palio Weekend (estate) models which are part of the same vehicle family.

The Fiat factory in Argentina was closed in 2002 due to unfavourable conditions brought about by a slowdown of the national economy, and the mothballed facility demanded fresh investments of US$60 million for its reopening in December last year when production of Siena resumed; it is currently the only model built by Fiat in the country.

The forward looking plans proposed by Fiat Argentina are very ambitious, the carmaker intends to achieve by 2010 a production capacity of 600,000 vehicles a year, while the Córdoba factory currently employs 4,200 staff. The pace of the Argentinean economic recovery, lower wage costs than in Brazil, and the need to ease capacity on the huge factory at Betim (Brazil) have all made reviving production at Córdoba more favourable.