In Detroit for the North American International Auto Show Fiat CEO Sergio Marchionne has said that they are still considering building a new low-cost car in conjunction with Tata Motors, an idea that was first mooted by the two carmakers last September. "This is part of the DNA of Fiat going back a number of years and I think Tata is the perfect partner to work with," he told the Reuters news agency in Detroit in Monday. "How, when and under what circumstances that project will take form is still under discussion, so you need to give us more time."

Fiat Auto first revealed that they planned to develop a new low-cost "B-compact" model during the wide-ranging investor presentation held at Lingotto in early November. Marchionne has been impressed by the Logan model, which has been positioned as an affordable market model by Renault. The Logan, which is sold under the Dacia brand name, has been well received across Eastern Europe, as well as with cost-conscious buyers in the more mature Western European markets. The Logan model is also set to be launched in India later this month. "The Logan was designed to be a spartan, limited-choice vehicle by definition," Marchionne told Automotive News Europe during an interview just prior to Christmas. "I think ours have greater potential than that, but I do not want to be derogatory about the Logan. It was a gutsy call to introduce it."

This new B-compact model, Marchionne further told ANE, "is structurally a scaled-down (small architecture), so we are not starting with a clean sheet of paper. It is designed to replace the Palio (world car family) and the Uno in the long term, being built and sold in western Europe and in emerging markets.
 

"Initially, I rejected the idea of creating our own architecture. Before we go spend a buck, let us find out whether we can join forces with somebody else. I told my guys to talk to other people and they did. We ran the numbers and the volumes; we looked at what the architecture had. But it did not have enough for us to go ahead and provide us with the solidity of a platform that would have allowed us to do what we wanted. Economically, therefore, it was not worthwhile. So we will build it alone, but there is enough volume in that to be profitable." Fiat and Tata Motors meanwhile are this year set to build and jointly-brand a new pick-up vehicle together.

Meanwhile, in Detroit on Monday Marchionne also responded to analysts concerns that his targets for 2010 were overly ambitious. "I have no intention of moving '07 targets and I have no intention of moving '08, '09 or 2010," he told Reuters. "We set the targets in 2004 for '04, '05 and '06 (and) '07 and we haven't missed one of them yet, and we closed the year 2006 totally in line with those forecasts from '04," he added. Marchionne is aiming to raise profit margins above the industry average to as high as 5.3 percent by 2010 to confront growing competition in Europe from Asian manufacturers, Reuters further reported.