November 23, 2008

Fiat plans low-cost car models

Fiat Group Automobiles, the Italian car-making giant, is gambling that the worldwide economic crisis means more demand for cheap cars.

Sergio Marchionne, Fiat's chief executive officer, told Automotive News Europe in an interview that he wants Fiat to become to the automobile industry what Wal-Mart is to retail stores -- the low-cost leader.

I am looking at the fast-changing automotive world and am saying: 'Which part of the chess board do I want to be on?,' Marchionne said. I want to become a serious player in the low-cost-cars corner of the chessboard at the speed of light.

Fiat has three low-cost models in the pipeline to be marketed under a separate brand name.

Two, code-named Project 326 and Project 327, are being developed in partnership with Fiat's Brazilian subsidiary. The cars, originally developed for Brazil, are to replace the Palio and Uno and to be given different styling for Europe.

The third car is a replacement for the Seicento mini-car, now produced at a plant in Poland. The new car, scheduled for introduction by early 2012, is to be low-emissions and low-weight and to sell for less than the Seicento, with an expected price below 7,000 euros ($8,800).