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Fiat currently owns 20 percent of Chrysler and can raise its stake to 35 percent once it satisfies three criteria: builds a plant in the U.S. to assemble fuel efficient engines; builds a 40 mpg car in the U.S. and expands Chrysler's international reach. For each milestone achieved, Fiat gets another five percent of Chrysler. The first hurdle looks like it will be cleared next year, with Fiat committing to building the 500's 1.4-liter, 92-horsepower engine in Dundee, Michigan at what was once the Global Engine Manufacturing Alliance plant.

According to Automotive News, Fiat is putting $179 million into the location. Yet while the powerplants will be built in Michigan, they'll be shipped immediately to Mexico to be placed in the waiting engine bays of the cutest car in the world. That's because 500 production will happen at Fiat's Toluca, Mexico factory. Half of those finished cars will come to America, half will go to Brazil, with sales predicted to begin at the end of next year.

As for what to make of the alliance so far, and recent news like Chrysler's speak-no-evil plans for Detroit Auto Show, Fiat CEO Marchionne said that it is going to take two years "to show some real results. We'll try and do it faster," he said, "but by the end of 2011 and in early 2012, you should be able to tell how our plan is working."

[Sources: Automotive News - sub. req.; Drive.com.au | Image: Bill Pugliano/Getty]


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  • 28 Comments
      • 5 Years Ago
      Why would anyone buy a Smart if they could buy this?
      • 5 Years Ago
      @ Jon

      Don't be ignorant mate.
      FIAT shared all it's technology with Chrisler.
      The estimated cost of the investment Chrysler would had paid if it had to develope the technology from scratch is 8 Billion USD, so it is not just 180 millions........

      Believe it or not, FIAt has one of the world more advanced eco-engine technology.
      • 5 Years Ago
      finally we get some good news in MI

      I still think the 500 is more of an emergin markets car than a US hit
      and unlikely it'll even sell in enough numbers here in MI for me to even see one
      still hope people will buy enough of them to keep the plant running
      • 5 Years Ago
      "That's because 500 production will happen at Fiat's Toluca, Mexico factory."

      Toluca is a Chrysler plant, it has never been owned by Fiat. Fiat only owns 20% of Chrysler. This would be like saying that the Nissan Altima is built in Renault's Kentucky plant (and Renault owns more of Nissan than Fiat does of Chrysler).

      This is a fully flex manufacturing site where the PT Cruiser and Dodge Journey are built (the two vehicles are not related, proof of it's flex ability).
      • 5 Years Ago
      Oh well...that's nice...great...good for Fiat...ho hum(!). I know all you car guys are ga-ga over the little Fiat 500, but it does nothing for me. Paint it brown and it looks like a chocolate bon-bon rolling around on four wheels. It's not 'cute', will look about as stupid on American highways as the tiny Smart, but I suppose there'll be a few dim-wits who'll buy the 500. It's a car designed for the diminuitive roads of Europe, but out of place on the freeways and major streets of American cities. Hopefully, Fiat - this time - will design and build cars that 'fit' American roads and tastes and not try to off-load the same kind of junk they imported here 40-years ago.
        • 5 Years Ago
        Mike, every drive in a city? A lot of people do. Not everybody is you.
      • 5 Years Ago
      Driving taste are changing in America. Some of you posters are going to have to get used to the fact there are more 'practical' drivers on the road now and its going to continue to be so because of the economy and gas prices. These types of drivers are not going away. If anything the whole "bigger is better" mentality that a lot masculine drivers have is a incredibly small demographic.
      • 5 Years Ago
      I can't believe the hate towards small cars by some in this forum.

      I've drive a 500 in Europe over long distances. Believe it or not it was a very satisfying drive, more satisfying in fact than driving a Honda sub-compact product here for years. Would it sell? I would buy it. I am already in the market for a Mini, so a 500 would be logical for me, though the Abarth version is more appealing now -- old rallying fan.
      • 5 Years Ago
      I'm a little perplexed by this story on Autoblog. I've seen reference to this story at a few other locations, and their details, particularly about this being the Multiair engine, are more specific.

      If this is the Multair, it's rated at 100hp, not 92. From the reviews of this powerplant from overseas journalists, it's quite a motor and should be just the ticket in the 500 and the 500C (the cabriolet) to help sell these cars.

        • 5 Years Ago
        It couldn't be rated differently in the US could it? That never happens...
        • 5 Years Ago
        To be fair, it may be somewhere in between.

        The 1.4L Multiair engine is actually rated at 100PS. PS stands for pferdestarke and is basically German for horse power. PS is equivalent to metric HP which is different than the International HP figures we use here in the US.

        100PS = about 98.6HP

        Same reason a lot of imported 200hp cars are rated at 197hp here and why the 1001hp Veyron is actually 981hp etc.

        It's possible that the engine may be retuned for the US market and that accounts for the difference. Or, it may just be a guess and we won't know the actual figures until a later date.

        • 5 Years Ago
        Why the timid headline? Using the word "Report" in the headline sounds like, "we only have this one story and don't blame us if it's not right." Given that there was a press conference announcing this last week where the governor spoke and both Detroit papers covered it, I think it's safe to report this as fact and not hedge.
      • 5 Years Ago
      I don't agree with Mike Lee completely that the 500 would look out of place on the freeways of America and the only dim-wits are all the people who drive to work every day, alone in their 4X4 Tahoes and F150's. Just wait in a few years when the economy picks up and gas goes back up to $4 or $5 gallon. These cars might not turn everybody's crank but there are people in their 20's and 30's that would just love to have one of these in the driveway even as a second car. I want the Abarth.
      • 5 Years Ago
      Great news for Michigan.
      • 5 Years Ago
      It's gotta be better than the cute little American car that I drive that gets 20 mpg.
      • 5 Years Ago
      Um, the 500C is the cabrio version of the 500.
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