Fiat Chrysler Automobiles NV (NYSE:FCAU) has pumped $350 million into its production plant in Belvidere to facilitate higher production capacity for the Jeep Cherokee.
The investment will create 300 new jobs in the manufacturing plant. The funds will also be used to retool the Belvidere plant for the production of the Jeep Cherokee. The company is preparing for a transition to Illinois in the meantime. The Belvidere plant currently produces the Jeep Patriot, Jeep Compass and the Dodge Dart but the company has announced that the production of the three models will be terminated towards the end of the year. Illinois governor Bruce Rauner stated that the investment will also boost the automotive manufacturer’s presence in the state. It may also be beneficial for state residents because it may open up more job opportunities.
The Belvidere plant has a long history of iconic automobile production since its construction in the 1960s. However, one of its greatest transformations took place in 2010 when Fiat Chrysler announced plans to invest $600 million so that it would start supporting the manufacture of future models in 2012. There have been numerous other changes spurred by the firm’s merger activities.
The vehicle manufacturer believes that fuel prices will remain low over the next few years. It is, therefore, shifting its strategy so that it can invest in the production of larger vehicles including trucks and SUVs rather than making smaller vehicles. The company reported impressive Jeep Cherokee sales in 2015 where 220,000 units of the model were sold. Sergio Marchionne, the CEO of Fiat Chrysler has high hopes for the Cherokee and he believes that its sales will continue to rise. The firm, therefore, is trying to position its production to reap the most from the sale of the Cherokee model.
The new changes mean the company will change its suppliers and the upcoming suppliers could rush to acquire real estate in the region.