The Palio was the founder member of the "Project 178 World Car" programme which was Fiat's first attempt to build a truly global car. Initially produced in Brazil it has gone on to be assembled in countries such as South Africa, India, China, Turkey, Poland and Egypt as well as Fiat's Argentinean factory at Córdoba.

The Palio's biggest market is Brazil where it has traditionally been the market's second best-selling car not far behind VW's Gol. Kept fresh by continuous facelifts the arrival of the new Uno last spring however decimated sales of the ageing Palio. Even so it has still found a strong resistance level at around 10,000 sales per month in Brazil and for the full year of 2010 the Palio sold 137,520 units.

Last October Fiat announced it would invest US$205 million in its factory at Córdoba to add a second model as it copes with the soaring demand for new cars in Brazil. The factory at Córdoba only came out of mothballs three years ago following the last economic downturn in Argentina to produce the Palio's sedan sister, the Siena, (as well as powertrain components) to ease pressure on the giant factory at Betim in Brazil, the biggest within the Fiat Group around the globe and which is one of the largest car making facilities in the world. Argentinean labour costs are also lower than in Brazil where they are rising in-line with the strong economic growth, although Argentina is subject to its usual high levels of inflation. The Córdoba plant is a modern production facility and includes a neighbouring supplier park for "just-in-time" manufacturing principles.

Argentina's Industry Minister Débora Giorgi announced the news last autumn, along with Rattazzi, which will see an investment of 813 million pesos (US$205 million) creating around 750 direct and 3,000 indirect jobs when full production of the second model kicks off next year.

Current capacity at Córdoba is 450 units per day which will rise to 900 units according to the ministry once the second model comes on-stream next year. However Fiat Argentina eventually sees full capacity being around 1,200 cars per day and this target could be reached in as little as two years time if Brazilian market demand continues to grow, a spokesman for Fiat Argentina, Leonardo Destefano, told Reuters last autumn. "In two years we should be using all of our installed production capacity, considering the outlook for the Brazilian market and the Argentine," Destefano said, adding: "To the extent that the regional market continues growing, we should be able to increase [production] without making investments, which we did a few years back. Everything depends on the market."

The new Palio will start off with 40 percent local content but that will quickly reach 50 percent. Rattazzi commented that around 85 percent of the vehicles built at Cordoba will be primarily destined for export, mostly going to Brazil but also some to other Latin American markets including Chile, Uruguay and Venezuela. Rattazzi sees this adding up to around US$750 million in sales annually. The new Palio will draw on trademark styling cues of the European Punto Evo, especially the bumper areas and the tail lights which are mounted high on the C-pillar, as well as the successful new Uno.