Fiat expects to increase its holding in Chrysler to 35 percent within two years, Chief Executive Sergio Marchionne said on Friday, as it works to turn around the struggling U.S. carmaker.
Fiat agreed last year to take over 20 percent of then insolvent group Chrysler. The Italian carmaker can add a further 15 percent in three tranches based on reaching certain objectives agreed with the U.S. government.
Marchionne said Fiat will start raising its stake in Chrysler this year.
"There are three steps of five percent. We will do one share this year, with the launch of the 500 in the United States," Marchionne told a press conference after the group's shareholder meeting. "We will add 15 percent within 24 months," he added.
One of the objectives is the production of a small, fuel-efficient car like the 500 in the United States, which Fiat plans to do this year.
"Chrysler is on the recovery track as foreseen in the plan," Marchionne said.
Fiat told shareholders earlier that the integration agreed last year with Chrysler was on track. The Italian group took a stake in Chrysler in the midst of a global economic crisis, taking the bold decision to expand its international footprint while other players were struggling.
Fiat also has signed strategic partnerships with automakers in China and Russia to give it access to growing markets.
Marchionne called the move on Chrysler a "second chance" for the carmaker, which itself came close to insolvency in 2004.
Fiat, which plunged to a loss in 2009 after a record year in 2008, should be near breakeven in 2010, Marchionne said.
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