With the environment playing an ever increasing role in the design and market segmentation of motor vehicles, particularly in Western Europe, Fiat Auto are placing high emphasis on technologies which follow a green route. Noticeably, the Fiat Research Centre is working overtime on new engine technologies which diminish emissions and improve fuel economy. Examples include the new Multiair variable valve technology, which has been under evolution for over a decade, the application of Compressed Natural Gas (CNG)  fuel systems, and a new 1.4 litre turbocharged gasoline engine which will be offered on the new Grande Punto model in 2007. 

Fiat analysts forecast size too to play an important role in the future, with the compounded annual growth rate of the “Mini” segment set at approximately 8.5%, only behind the Small MPV segment which is set to increase in volume by approximately 9.5%. Alongside the new Fiat 500, which is currently being developed in collaboration with Ford, Fiat has also confirmed the development of a new “Small” engine, which will feature either 2 or 3 cylinders. Targeted for production  in 2010, it is unclear for exactly which model the engine will be used for. 

Although a three-cylinder engine may sound underpowered for the new Fiat 500, it is a layout that has been utilised by many manufacturers in this segment in the past.
 

Another possibility is the application of the engine in a yet smaller vehicle, similar in size to a Smart, a vehicle category that the Elasis engineering research arm of Fiat Group have by coincidence been working on.

The Elasis Micro Car project was spurred by the need for a chassis which allows for a reduction in the wheelbase of a vehicle, and also for the adjustment of the accommodation of the passenger compartment, permitting various vehicle configurations such as pick-up, station-wagon, saloon, and coupé. Further requirements of the project were the substantial preservation of the external appearance of the bodywork, and a high degree of structural rigidity under all conditions in the different configurations. 

The result of the project is a bulbous looking Micro Car, which has a wheelbase that can be adjusted by 500mm. With a total length of only  2300mm in short form, the vehicle is some 20 cm shorter than the Smart, yet can be extended to 2800mm. The most notable visual characteristic of the vehicle is the height, proportionally high at 1775 mm, as opposed to the 1459 mm of the Smart. A vertical driving position and an underfloor engine both increase the packaging efficiency and improve the versatility of the vehicle by allowing for more variants.