Fiat may close second Italian factory, Marchionne says
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MILAN (Bloomberg) -- Fiat CEO Sergio Marchionne said he may close a second Italian factory as European auto deliveries sink for a fifth straight year.
Fiat will shut another plant after closing one in Sicily last year unless it can come up with an economically viable plan to use excess capacity to build cars for North America, Marchionne told reporters on Tuesday in Turin.
Marchionne said he expects European car sales to remain around the current level for the next two to three years. Fiat's first-quarter operating losses in the region almost doubled to 207 million euros.
"If that is the demand in Europe, there is at least one extra car plant in Italy," Marchionne said. "If we manage to utilize the capacity to export to the U.S., this issue will disappear."
Fiat stopped production at its Termini Imerese plant in Sicily in November. The 41-year-old factory near Palermo built the Lancia Ypsilon three-door minicar, which was replaced by a new five-door Ypsilon built in Fiat's Tychy plant in Poland.
Fiat's competitors are also considering way to reduce excess capacity. General Motors Co.'s Opel unit may close a factory in Bochum, Germany. PSA/Peugeot-Citroen's French factories in Aulnay and Rennes are at risk of being shut, according to union officials at the automaker.
The drop in European car sales accelerated in May to 8.4 percent, the eighth consecutive monthly decline, according to industry association ACEA.
Fiat, PSA/Peugeot-Citroen and Renault have posted the steepest slumps in the region this year, plummeting 15 percent or more in the first five months.
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