Fiat is set to invest
US$205 million in its factory at Córdoba in Argentina to
add in a second model as it copes with soaring demand
for new cars in neighbouring Brazil and production
output could reach maximum capacity of 1,200 cars per
annum in two years time.
The factory at Córdoba
only recently came out of mothballs following the last
economic downturn in Argentina and it is now busy
producing the latest version of the Progetto 178
"Project World Car" family's long-running B-segment
Siena sedan (as well as powertrain components) to ease
pressure on the giant factory at Betim in Brazil, the
biggest within the Fiat Group around the globe and which
is one of the largest car making facilities in the
world. Argentinean labour costs are also lower than in
Brazil where they are rising in-line with the strong
economic growth. The Córdoba plant is a modern
production facility and includes a neighbouring supplier
park for "just-in-time" manufacturing principles.
Argentina's Industry
Minister Débora Giorgi announced the news, along with
Fiat Argentina President Cristiano Rattazzi, which will
see an investment of 813 million pesos (US$205 million)
creating around 750 direct and 3,000 indirect jobs when
full production of the second model kicks off next year.
Giorgi sees industrial growth in Argentina hitting 9.4
percent this year with the auto industry being one of
the biggest driver.
Current capacity is
450 units per day which will rise to 900 units according
to the ministry once the second model comes on-stream
next year. However Fiat Argentina sees full capacity
being around 1,200 cars per day and this target could be
reached in as little as two years time if Brazilian
market demand continues to grow, a spokesman for Fiat
Argentina, Leonardo Destefano, told Reuters. "In
two years we should be using all of our installed
production capacity, considering the outlook for the
Brazilian market and the Argentine," Destefano said,
adding: "To the extent that the regional market
continues growing, we should be able to increase
[production] without making investments, which we did a
few years back. Everything depends on the market."
The proposed new
model, codenamed CBD, will start off with 40 percent
local content but that will quickly reach 50 percent.
Rattazzi commented that around 85 percent of the
vehicles built at Cordoba will be primarily destined for
export, mostly going to Brazil, which is seeing strong
economic growth,
but also some to other Latin American markets including
Chile, Uruguay and Venezuela. Rattazzi sees this adding
up to around US$750 million in sales annually. Meanwhile
this month will also see Fiat's dealers in Argentina
adding the long-running Brazilian-built Uno into the
showroom portfolio.
