Fiat plans to resume production in Córdoba on May 11

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Fiat Chrysler Automobiles (FCA) plans to resume production at the plant located in the Ferreyra neighborhood on May 11. The decision will depend on whether, finally, the Government decides to lift preventive, social and compulsory isolation by that date.

“The idea is to start with a daily production of 310 vehicles and with the largest number of personnel,” said FCA CEO Martín Zuppi, through a videoconference with journalists from all over the country. The Commercial Director of the company, Pablo García Leyenda, and the Director of Finance, Diego Sabena also took part.

The terminal plans to have ready next week what will be the labor regime with which production will start.

“We are working on different hypotheses, looking at the best options. We have not defined whether we are going to do a total survey for the thousand employees or we are going to do it in shifts,” said Zuppi, who was responsible for highlighting that the return to work will be under strict safety rules for staff.

Initially, the plant will start working three days a week and, depending on demand, will apply the current suspension program.

With 2,500 employees, FCA paid the salaries for March and does not rule out resorting to the assistance of the national government to face future remuneration.

“We have not yet asked for help, that does not mean that we are not going to ask for it; we pay in March and we are analyzing it,” Sabena said.

Production

At the start of the year, the projection of the automaker for 2020 was from a better year to the previous one. Before the pandemic, it planned to produce 30 percent more units – 10,000 cars – a calculation based on an increase in exports to Brazil, according to the numbers of the terminal itself.

Even with this forecast, the complex where the Fiat Cronos is manufactured was going to use only 50 percent of its installed capacity, a level that forced the continuation of the suspension scheme.

“At the beginning of the year we anticipated a production in Córdoba of 45,000 vehicles, which has now been reduced to around 30,000. It will be necessary to see how the domestic market and exports to Brazil evolve after the pandemic in order to improve that forecast,” said Zuppi. , who announced that it will be very difficult to resume the projection of 45 thousand units in 2020.

At the Ferreyra plant, FCA produces the Cronos model, which has the Brazilian market as its main export destination. Furthermore, the largest initial production forecast for 2020 was based on the growth in demand in Brazil. However, and despite the fact that quarantine in Brazil is more flexible than in Argentina, commercialization is paralyzed.

In this scenario, in FCA they assure that only in July could shipments resume to Brazil, due to the high stock available in neighboring country.

With an automotive industry that has been paralyzed for more than 35 days, from the terminals they project a domestic demand for 2020 of around 250 thousand units, zero kilometers. Within that market, FCA plans to grow in participation.

According to Zuppi, the aspiration is to reach 15 percent, above the 12.4 percent that the company obtained in 2019 with all its brands. “It is the participation we had in the first quarter of the year,” said the CEO.

Commercialization

In addition to projecting a return to production, the company also shapes what will be its business strategy after the pandemic. To start up the activity in the concessionaires, the terminal launched a six-year fixed-rate financing facility in pesos this week.

“In the first days of the operation, twice as many tickets were registered in some dealerships as during the previous days,” compared Pablo García Leyenda, commercial manager of FCA.

The crack that was opened during the quarantine in the exchange rate formed an opportunity customer for certain vehicle models, especially mid-range and high-end.

However, the difficulties for sale are in the vehicles that make up the volume models, to which the fall in purchasing power has relegated them to consumer preferences.



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