Fiat SpA is planning to increase production of its vehicles from 650,000 to 800,000 – about 1 million, over the next couple of years which will include a sedan and a convertible under the Lancia brand along with some cross-over and sports utility vehicles and upgradation of 13 of its existing models.

Moreover, it plans to allocate more than €8 billion ($11.39 billion) towards research and development.

Ever since Fiat bought a 20% stake in Chrysler earlier in the year, it has been planning to model some new cars on the existing Chrysler designs. The Fiat group "will finally cover in an adequate way the medium to high segments", said Mr. Sergio Marchionne, CEO of Fiat.

Simultaneously, the company is planning to shut down its non-cost effective production unit in Sicily. The lack of infrastructure at Termini Imerese makes the cars €1000 more expensive than their counterparts being produced elsewhere. The company has decided to fold up this problematic plant and is hinting at setting up a production unit for its Fiat Panda in Southern Italy. This news has instigated a strike by the workers backed by the labour unions even as Economic Development Minister Claudio Scajola calls for a review meeting on the issue.