Fiat is considering launching an entry-level brand for developing markets as it looks for opportunities to grow its manufacturing operations and increase profitability.
Fiat CEO Sergio Marchionne admitted the success of Renault’s budget Dacia division and the impending relaunch of Datsun by Nissan in 2014 encouraged his team to analyse the potential of adding a low-cost brand to its portfolio.
“We are wondering if there is space for a low-cost brand such as Dacia in the Fiat world,” Marchionne told industry journal Automotive News Europe.
The Italian car maker has been pondering the introduction of a budget brand for more than five years, but the idea now appears to be gaining momentum as Marchionne plans to turn the Fiat brand into a more premium offering, starting with the Fiat 500 city car and the Panda compact SUV.
“We need to see if there is a space left below after the Fiat brand moves up,” he said.
Automotive News Europe suggests the launch of a budget brand from Fiat could see the return of the Innocenti name – an Italian brand purchased by Fiat in 1990.
Marchionne said any low-cost models would be built in developing markets as it was not financially viable to produce such vehicles in Europe.