Chrysler to produce Fiat cars

August 17, 2009

, WASHINGTON, Aug 17 – US automaker Chrysler, which has partnered with Italian Fiat as part of its bankruptcy plan, is considering producing Fiat 500 subcompact cars at its plant in Mexico, The Wall Street Journal reported Monday.

Citing "people familiar with the matter," the newspaper said Chrysler is considering what other Fiat models to introduce to the US market.

Chrysler is looking at making a small Fiat engine for Fiat 500 at a Chrysler plant in Trenton, Michigan, the report said

It is also considering building a Fiat-derived compact car slightly larger than the 500 in the United States, The Journal said, citing an unnamed "person familiar with the plans."

Chrysler and Fiat sealed a deal in June to create a new global auto giant in a milestone for the world industry after the Italian champion stepped in to salvage the bankrupt US firm.

Fiat will at first hold 20 percent of Chrysler Group, with its equity stake rising to 35 percent and eventually to a majority stake as long as targets mandated by the deal are achieved and US government funds are repaid.

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