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Fiat Chrysler CEO Marchionne lays out global push

Newly-merged Fiat Chrysler Automobiles laid out aggressive plans Tuesday, including a revitalisation of the Alfa Romeo sportscar line and the doubling of Jeep sales, mainly in China.

DETROIT: Newly-merged Fiat Chrysler Automobiles laid out aggressive plans Tuesday, including a revitalisation of the Alfa Romeo sportscar line and the doubling of Jeep sales, mainly in China.

Chief Executive Sergio Marchionne said the Italian-American carmaker aims to build sales not only in the United States but in other markets as it seeks to rival Volkswagen and General Motors.

"The history of the automobile industry is littered with alliances that have failed," Marchionne told investors, suppliers and reporters at the Chrysler headquarters in Detroit, newly relabeled Fiat Chrysler.

"In the past five years, Fiat and Chrysler have learned to work together and trust each other," he said.

This has led to a sharing of technical knowledge and market savvy, which is turning the company into a true global automaker, he said.

"In a flat world, you cannot be secure in your own market unless you can compete on a global basis," Marchionne added.

Fiat completed its takeover of Chrysler in January, with the strong profits from the American unit helping hold up the parent, suffering from the deep downturn in the European economy.

Critical to the combined company's future is building more presence in the world's strongest markets, including the United States and China.

Jeep especially has been singled out for a broad growth effort, Mike Manley, head of the Jeep brand, told investors.

Jeeps are now built only in the US but the firm expects expects sales to grow by 20 per cent per year over the next five years, doubling this year's expected 1 million units by 2018, Manley said.

To the next five years Jeep will begin building cars in Brazil, Italy, India and China.

"Jeep is one of the fastest growing imported brands in China and this is our largest Jeep market outside the US," Manley said.

A separate push is in store for Alfa Romeo, which has sagged behind rival luxury sports cars in Europe and has been virtually absent in the United States while Mercedes Benz, Audi and BMW have enjoyed booming sales.

It will invest around $7 billion through 2018 to relaunch the high-end and sporty Alfa Romeo line with eight new models expected.

Fiat said in a strategy presentation that it expects to revive Alfa Romeo with an increase in output from 74,000 cars in 2013 to 400,000 in 2018.

Fiat outlined an aggressive jumpstart of the long-sagging mark that includes the launch of its first new model in late 2015, with the remaining new cars entering the market between 2016 and 2018, according to a presentation at an investor day in Detroit.

In a message directed at Italian officials worried that Alfa manufacturing could be moved to other countries, the presentation said "cars and engines to be industrialized in Italy."

Officials in Fiat's home market have complained that many of the company's manufacturing sites in Italy are underutilized. Fiat Chrysler chief executive Sergio Marchionne had also previously discussed moving Alfa Romeo's manufacturing operations overseas.

The company has committed 200 engineers to the team so far and the number is expected to grow to 600, said Harald Wester, chief technology officer of Fiat Chrysler.

Wester, who is also the Fiat executive in charge of Alfa Romeo, said the brand has earned much glory on the race track but has never had much financial success.

"It neglected its roots," noted Wester, adding Alfa-Romeo's commercial offerings lacked the technology and spirit that had been the brand so appealing when it went racing.

But a presentation showed a challenging effort to grow sales from 74,000 cars in 2013 to 400,000 in 2018, introducing eight new models over that time.

Two senior heads from Ferrari, another Fiat unit, will run Alfa's day-to-day operations, amid rumors the top-end model might have a Ferrari-developed engine.

"Our German competitors have enjoyed phenomenal success," noted Wester. Alfa Romeo, will double in size of its engineering staff to 600 by the end of next year and the goal is to deliver the best rear-wheel-drive automobile architecture in the world, he said.

"Our future products will be equipped with cutting edge powertrains," he added.

Meanwhile Gualberto Ranieri, a Fiat Chrysler spokesman, said the full legal merger of the two should be completed during the middle of 2014 and that it will then move for a listing of its shares on the New York Stock Exchange later in the year.

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