Fiat Chrysler CEO says can build Tesla Model 3 rival if makes business sense

Sergio Marchionne, CEO of Fiat Chrysler, gestures at the 86th International Motor Show in Geneva, Switzerland, March 1, 2016. REUTERS/Denis Balibouse

AMSTERDAM (Reuters) - Fiat Chrysler Automobiles (FCA) FCHA.MI could build an Italian-style rival to Tesla's Model 3 within 12 months if the electric carmaker can prove the vehicle makes business sense, FCA Chief Executive Sergio Marchionne said on Friday.

Tesla TSLA.O said last week it had received more than 325,000 orders for its new Model 3 sedan in the first week of bookings, although there is no certainty it will be able to convert all those orders into sales as many of them could be canceled.

“I am not surprised by the high number of reservations,” Marchionne told journalists following a shareholder meeting in Amsterdam, saying he had great respect for Tesla chief executive Elon Musk. “But then the hard reality comes in ... making cars, selling them and making money doing so.”

Marchionne said he did not understand how the Model 3, Tesla’s first mass-market car, could be sold for 35,000 euros ($39,600) at a profit.

“If he can show me that it can be done, I will do it as well, copy him, add Italian style to it and put it on the market within 12 months,” he added.

Reporting by Agnieszka Flak; Editing by Mark Potter