Chrysler mulls Fiat 500 production in Mexico, even as the US auto market looks uncertain

Troubled US automaker, the Chrysler Group, which recently aligned with Italy's Fiat SpA, is planning to produce the Fiat 500 subcompact in Mexico.

The Wall Street Journal reported that the company is also in the process of identifying which Fiat models to introduce into the US market under direction of its Italian partner, according to the report on its website.

The paper also quotes a source saying the company's plans also include making a small Fiat engine at a Chrysler plant in Trenton, Michigan, and building a small Fiat-derived compact car that would be slightly larger than the 500 in the US.

The plant in Toluca, Mexico currently makes the Dodge Journey cross and PT Cruiser. The plant could be an ideal location for manufacturing the 500 as the cars could be exported to South and Central America where the Fiat brand enjoys much popularity, the report said.

Fiat acquired a 20-per cent stake in Chrysler, earlier this year with agreements to allow it access to Fiat Technology and platforms. The American company filed for bankruptcy in April.

The two auto majors have entered into a pact to create a new global auto giant after the Italian carmaker stepped in to salvage the distressed US auto major.
Under the agreement Fiat has taken a 20-per cent stake in the Chrysler Group, which will rise to 35 per cent and eventually to a majority stake provided targets mandated by the deal are achieved and US government funds are repaid.