TURIN – A Fiat factory in Sicily could be used to assemble cars shipped from China for sale in Europe if car dealer Massimo di Risio's plans become a reality. But his goal to sell up to 65,000 units a year of rebadged cars from Chery Automobile faces hurdles.
Di Risio is set to buy a factory in Termini Imerese, Sicily, from Fiat for a token sum of 1 euro.
Helped by large incentives from the Italian and regional governments, his DR Motor Company aims to reopen the factory, which Fiat closed on November 24, to build from completely knocked-down kits about 60,000 units a year of four rebadged Chery models.
Di Risio plans to start production at the factory late next year, initially for the Italian market with exports to other European markets starting in 2013.
A former race car driver, di Risio, 51, opened his first car dealership for the Lancia brand in 1983. His DR Automobiles Groupe now sells 22 brands. In 2009 its revenue was 79.6 million euros and it sold 6,200 new cars.
Di Risio has long had ambitions beyond selling cars. In 2006, he opened a facility to assemble rebadged Chery Tiggos from semi knocked-down kits in Macchia d'Isernia, about 100km north of Naples. He launched the compact SUV under his own "DR" brand in Italy and named it the DR5.
Di Risio says his aim is to capture sales from brands such as Kia, Chevrolet, Hyundai and Nissan and he describes DR Motor as "Italy's second-largest carmaker" after Fiat, but the company has not met its early sales goals and it has financial difficulties.
The initial goal was to sell 12,000 units a year in Italy in the company's first year of operation and expand into other European markets.
But the DR5, which sells from 13,880 euros in Italy, did not win the hearts of Italian buyers in large numbers. Nor did two other models launched later, the DR1, a rebadged Chery M1 minicar, which sells from 7,980 euros and the DR2, a rebadged Chery A1 subcompact whose price starts at 8,980 euros
It took DR Motor five years to reach 12,000 cumulative sales in October of this year. Sales peaked to almost 5,000 units last year, when DR's share reached a quarter of a point of the Italian market. This year, sales are expected to be 3,000.
Di Risio has struggled to overcome financial and logistics problems. The last financial results publicly available show DR was already in a fragile financial situation two years ago.
At the end of 2009, DR had net assets below 10 million euros but net debts for 34 million euros. In 2009, DR reported 47 million euros in revenues, a 1.6 million euro operating profit and a 35,000 euros symbolic net profit, the first black ink since the company was founded in 2006.