TURIN -- Fiat-Chrysler will delay the launch of a new Jeep compact SUV planned for production in Italy.
The new Jeep, which is code-named B-SUV, had been due to go into production in 2013 in Fiat's Mirafiori plant in Turin. Fiat now says production will begin in the second quarter of 2014.
The B-SUV will be smaller than the Jeep Compass and Patriot and will be sold in the United States, Europe and other markets. A sister model for Fiat brand will begin production at the factory earlier in December 2013. This will replace the Fiat Sedici currently built by Suzuki in Hungary.
Fiat needs new models such as the replacement Sedici to counter falling sales. Last year, European sales of the Sedici declined 10 percent to 14,800 units, according to data from Jato Dynamics.
On Wednesday, Fiat said it will delay a 1 billion-euro ($1.3 billion) expansion of the Mirafiori plant's capacity until late 2013, one year later than it originally planned. The expansion will enable the factory to build 280,000 compact crossovers a year.
The delay follows a spending review of future investments by Fiat.
Fiat expects total market sales in Europe this year to decline to between 12.9 million and 13.4 million vehicles from 13.6 million unit last year. In its core Italian market, the automaker expects sales to decline to 1.65-1.70 million units, below the 20-year low of 1.75 million units sold last year.
Alfa, Lancia models
Fiat said Mirafiori will continue to build the Alfa Romeo MiTo subcompact model, including a revamped version due next year, and it will extend Mirafiori production of the Lancia Musa small minivan, originally slated to stop production at the end of last year.
The architecture to be installed in Mirafiori is internally called Small Wide, a wider, U.S.-compliant version of Fiat's Small architecture. It has four-wheel-drive and the Jeep model built there will be trail-rated.
The Fiat 500L will be the first vehicle to use Small Wide. The 500L will debut at the Geneva auto show next month and will be built in Serbia to replace the Idea and Multipla models.