Alfa Romeo is planning to build cars at a new factory in North America, a strategy that Fiat Group CEO Sergio Marchionne sees as vital to making the planned US relaunch become long-term profitable. His comments came in a wide ranging interview given in Automotive News Europe yesterday.

The current falling value of the US dollar is prompting Europe’s leading automakers to consider building new factories in the United States. Europe’s biggest automaker, Volkswagen Group, is evaluating plans to built a plant in the US; it was the first of the modern Europeans to have an assembly plant in North America but shut it 20 years ago after it struggled to turn in a profit. Meanwhile prestige European brands, Mercedes-Benz and BMW both have successful stateside factories, while other European mass-market automakers considering building US plants include PSA Peugeot-Citroën.

In the ANE interview Marchionne said that the US relaunch of Alfa Romeo would rack up a loss for the first three or four years, due to competitive pressures and the weakness of the dollar against the strength of the euro. “It was already expensive when the dollar was 1.10 to the euro; now it is more expensive,” he told ANE.

Referring to a new Alfa Romeo factory Marchionne told ANE: “Mid to long term, I have no doubt we will have to produce in the NAFTA [North American Free Trade Agreement] area to sell at a profit in the US.” The NAFTA members are made up of the United States, Mexico and Canada. This in fact wouldn’t be the Fiat Group’s first automotive factory in the US as in 1909 it opened a plant in Poughkeepsie, located 75 miles north of New York City, although it ceased operations a decade later.

Marchionne also told ANE yesterday that his previous interest in buying the Land Rover and Jaguar brands that Ford has recently put up for sale was parly motivated by the forthcoming Alfa Romeo stateside relaunch. He was interested at the time in Land Rover’s US distribution network and Jaguar’s architecture and powertrains. He said that both under Fiat ownership would have been used to the benefit of Alfa Romeo.

“At the same time, we felt we would not be able to manage the Jaguar and Land Rover brands while also leading the proper execution of the Fiat Group Automobiles re-launch plan,” he commented. However he said he was ready to discuss possible future cooperation with the new owners of Land Rover and Jaguar, which are being sold off together. India’s Tata Motors, with whom Fiat already have a wide ranging industrial joint venture, and are a leading contender to come out as the new owners. Fiat has been advising Tata on its bid.
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