EUROPE: How Bad Are Things in Europe? Ask Fiat
Friday, June 1st, 2012
Italian automaker Fiat S.p.A. is taking drastic measures in order to deal with the depressed European market for its cars.
According to The Wall Street Journal, Fiat has decided to postpone the introduction of two new models and it is taking steps to save money by slowing the development of other new models. This in the face of a promised $20 billion investment in Italy on new plants and equipment.
The models being postponed are the new Grande Punto and the Bravo, which are now likely to be introduced as 2014 models some time in the future.
In an effort to boost sales, Fiat is now offering Italians a discount on fuel purchases for up to three years if they buy a new car before the end of July. Fiat said it will pay one euro per liter for gasoline and diesel. The savings to consumers are said to amount to about 45%.
On the announcement of the model cancellations, Fiat CEO Sergio Marchionne took quite a bit of heat from Fiat dealers who complained that the Fiat line of cars is already looking old compared to new models introduced by competitors. Fiat April sales in Italy dropped 18% from last year and fell 10% in May.
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