MILAN (Bloomberg) -- Fiat and PSA/Peugeot-Citroen plan to invest more than 700 million euros ($900 million) on new delivery vans over five years to cut costs as they replace aging models at their joint plant in Italy.
Fiat will invest 550 million euros, while PSA will invest 150 million euros in developing new versions of the large Fiat Ducato, Peugeot Boxer and Citroen Jumper models, Fiat said.
The vehicles will be built at the manufacturers' SevelSud plant in Italy.
With the extension of the van partnership, "we are relaunching a bet together with Peugeot," Fiat CEO Sergio Marchionne said today at an event at the factory in Val Di Sangro. "We have started the investment, including development costs for products and works to modernize the plant," he said.
Fiat and PSA agreed in May 2011 to end a similar partnership to make mid-sized delivery vans in France. PSA plans to invest more than 750 million euros to produce a new vehicle on its own at the SevelNord plant.
The cooperation at the SevelSud joint venture factory runs to 2019, according to the companies.
Reuters contributed to this report