Fiat Chrysler Automobiles plans to spend over €500m at its plant in Termoli, Italy, to produce two new engines for its planned Alfa Romeo cars.
The first variant is an advanced 4-cylinder engine, while the other is a Ferrari-derived 6-cylinder engine, both being developed for Alfa Romeo.
The proposed investment will expand the plant's capacity to produce more than 200,000 units of the two engines.
Fiat Chrysler said that the facility will be capable of producing approximately half of the total volumes projected in Alfa Romeo's plan for 2018.
Work on the plant is underway and a cylinder head tooling machine will be installed on the production line.
Fiat Chrysler Automobiles CEO Sergio Marchionne said: "This high tech project is an integral part of our bet on Alfa Romeo."
The company purchased Alfa Romeo from state holding company Istituto per la Ricostruzione Industriale in 1986 and has been seeking to revive the brand which currently has three car models.
Fiat intends to spend €5bn in Alfa Romeo to ramp up production and add eight new models, in line with plans to boost sales to 400,000 vehicles in 2018, reported Reuters.
