Mitusbishi to supply pick-up trucks to Fiat from 2016

A deal to produce a new pick-up truck with Mitsubishi Motors, from 2016, would see Fiat increase commercial vehicle sales as the Japanese company boosts output at its plant in Thailand, Reuters reported.

Under a non-binding memorandum of understanding unveiled today, the companies would team up to develop and manufacture the pickup, to be supplied by Mitsubishi, based on its best-selling model, the L200.

The mid-sized pickup, a long awaited addition to Fiat's Professional line-up, is among five new light commercial vehicles it planned to deliver as part of its ambition to up the division's sales by 40 per cent to around 600,000 units by 2018.

The Japanese company's L200 pickup had several rivals in its category globally including Toyota's Hilux, Nissan's Navara and similar-sized pickups from Ford, Isuzu, Mazda and Volkswagen, among others.

The new pickup truck was expected to help Fiat boost its share of the Latin American market and help turnaround its loss-making business in Europe, the Middle East and Africa. However, it would not be able to do the same in Asia, which continued to remain the weak region for the group.

The deal would help the Japanese automaker maintain production levels at its hard-hit plant in Thailand, where the company was faced with a drop in sales and production due to a political crisis and falling demand for cars.

Meanwhile Fiat is pushing plans to combine with Chrysler later this year in a reorganisation that would see its corporate headquarters shift to London and with its stock listing on the New York Stock Exchange, as the merged company focusrd on higher-end cars, Bloomberg reported.

Chrysler sold Ram heavy-duty pickups, and a model was under development under its Jeep nameplate. In the light commercial-vehicle market, the Italian manufacturer has its main pickup offering as the Stada from the Fiat Professional light commercial-vehicle unit.

Mitsubishi's cooperation projects with European partners include a cooperation agreement it reached last November, with French carmaker Renault SA and Japanese partner Nissan Motor Co on sharing technology and manufacturing capacity, with two sedans to be based on Renault models.

The company additionally has an agreement with Paris-based PSA Peugeot Citroen (UG) to develop electric versions of the French company's light commercial vehicles.