CORRECTED-Fiat pledges $550 ml to retool Mexico plant

(Corrects Fiat ric in first paragraph)

TOLUCA, Mexico Feb 8 (Reuters) - The head of Fiat SpA (FIA.MI) said the automaker will invest $550 million in Mexico to begin production of the compact Fiat 500 model car.

The investment will retool a production site developed by Chrysler which emerged from bankruptcy in June under the management control of Fiat.

The investment will allow the plant outside Mexico City to begin production by December, said Chrysler Chief Executive Sergio Marchionne, who also heads Fiat.

"Chrysler is going to invest over half a billion dollars in this plan to launch production of the 500 (model) beginning in December," the Italian executive told reporters at the factory. (Reporting by Noel Randewich, editing by Leslie Gevirtz)