FRANKFURT -- Fiat Auto aims to cut costs by around 1 percent to counter weak pricing power, the head of Italian industrial group Fiat's car division told a German newspaper, adding it would move a plant to Argentina.
"Because pricing discounts in Europe are rising more strongly than expected, we have to take countermeasures on the cost side," Herbert Demel was quoted as saying by the Financial Times Deutschland paper in an interview printed on Friday.
He said he was aiming for additional cost savings of "around 1 percent".
To this end, Fiat will move one engine plant to Argentina from Italy and close another, cutting 500 jobs, the paper said.
Powertrain, an engine and car parts assembly joint venture between Fiat and General Motors, had said on Sept. 8 it would lay off temporarily 700 workers at two Italian factories from October.
The company, which makes transmission systems and diesel engines, said it would lay off the workers because it was winding up production of two types of engines after demand fell.
Powertrain employs about 22,000 people in eight European and South American countries, including 8,000 people in Italy.
In the interview, Demel said Fiat was reviewing additional projects with GM, with whom it also cooperates on purchasing.