UPDATE 2-Fiat-Chrysler expects new plant to boost Brazil profitability

martes 4 de marzo de 2014 15:08 GYT

* New plant in Brazil to open next year, help boost sales

* FCA considering options to help fund premium strategy

* Alfa Romeo production to stay in Italy - CEO

By Agnieszka Flak

GENEVA, March 4 (Reuters) - Fiat Chrysler Automobiles (FCA) expects a new plant in Brazil to boost its profitability in that market by 2017 after a cut to subsidies and currency effects hit profits there last year, Chief Executive Sergio Marchionne said on Tuesday.

FCA, created after Fiat took full control of Chrysler in January in a $4.35 billion deal to create the world's seventh-largest auto group, cut its 2014 profit forecast after an 80-percent slump in Latin American core earnings in the final quarter of 2013.

Brazil used to account for about one fifth of Fiat profit, helping to offset losses in Europe, but an end to car sales incentives, higher input costs and currency effects have weighed on profitability in the region.

"I'm absolutely convinced that by 2017, which will be the first year of full production at the Pernambuco plant, we will return to making double digit margins in Brazil," Marchionne told journalists at the Geneva auto show. He did not say whether the margins referred to profit or sales.

The Pernambuco plant, which will open next year, will produce models that better match market demand, Marchionne has said. It will build the small Jeep Renegade that FCA unveiled at the car show, and whose production has already started at a plant in Italy, among other models.   Continuación...