Fiat and the Chrysler Group will be producing Jeep and Alfa Romeo models in Fiat’s Turin factory as part of a joint venture aiming to respond to the global market of the brands. The partnership will be injecting around $1.3 billion to properly equip the facilities.

The factory will be busy with the production of the Giulia sedan and its station wagon version which will take the place of the 159 range of Alfa Romeo. It will also produce the medium SUVs under the badge of Jeep and Alfa. The SUV of the Alfa Romeo is aiming to compet with the GLK of the Mercedes-Benz, BMW X3, and the Audi Q5. The model under the Jeep brand will be stepping in for the Compass/Patriot.

The volume of vehicle production is expected to roll out towards the end of 2012 according to Fiat. Fifty per cent of the vehicles will roll out to European dealerships while the other half will be heading off to North America. The Alfa Romeos will play a vital role in the relaunch of the brand in North America.

The Turin factory used to have an output of 178,500 according to 2009 reports but this will be boosted up to around 250K to 280K units annually. The vehicles that will go on production are also expected to be patterned after the Compact Wide architecture of Fiat which is all about comfort, safety, and performance.

Fiat insiders also shared that the Italian carmaker is aiming to raise its holding with Chrysler which is currently at 20% Fiat is going for 25% during the first three months of next year and for 35% before the end of 2011.