Fiat chief executive Sergio Marchionne on Tuesday said the Italian carmaker would invest eight billion euros over the next two years to increase productivity, the news agency Ansa reported, citing sources familiar with the matter, dpa reported.

"We have an ambitious plan for Fiat, most of all in Italy," Ansa quoted Marchionne as saying.

During consultations with the Italian government and unions, Marchionne also explained why there would have to be cost-cutting measures. "To just focus on social issues would lead to the death of the company," he said, adding that costs and social responsibility had to be balanced.

A Fiat plant in Italy is under discussion for closure.