The new Fiat 500X SUV and a new baby Jeep SUV will start production in early 2014 as part of a £810m investment at the Melfi factory, the company announced today.

The move marks the first big boost in Fiat’s plan to move away from building mass-market cars in Western Europe and towards upmarket models with higher profit margins.

The first model off the line will be the new Jeep. Only available with all-wheel drive, it will be sold worldwide, with Melfi the only production source. After the 500X, a third model will be added in 2015 to replace the ageing Punto, though it will not be a conventional supermini and is intended to command a more premium price. All three models are based on Fiat’s new ‘Small Wide’ platform, which currently underpins the 500L MPV.

The complete re-building of the Melfi facility (which will see 500 new welding robots, a new paint shop, new panel stamping facilities and new assembly area) will eventually allow up to 1600 vehicles to be built on a three-shift pattern. Fiat says that the new production lines will be flexible enough to build four models, so another 500L-based model looks to be on schedule for 2016.

Fiat says that it will introduce 19 ‘made-in-Italy’ models by 2016. Aside from the four compact models at Melfi, there will also be nine new Alfa Romeos and six Maseratis. Fiat’s budget models – the Panda and smaller 500 models – will eventually be made outside Western Europe where build costs are lower. The 500L is already made in Serbia, at what was the Zastava plant.