Lowest-priced Fiat will be well above Tato Nano level

Frankfurt - Fiat's planned super-low-cost car for emerging markets will be priced well above the Nano, the no-frills model promised by Tata of India, according to the chief of the Italian group's car division, Lorenzo Sistino.

"It'll be a proper family car, not comparable to the Nano at all," Sistino said.

Sistino, who heads Fiat Automobiles SpA, declined to disclose the entry price for the bargain Fiat, and said no decision had been take yet as to whether to sell it under the Fiat brand or create a new marque for it.

"It could be a different marque. Fiat is not a cheap brand," he told reporters Tuesday night in Frankfurt.

Fiat has close links with Tata, whose chief Ratan Tata sits as an independent director on the parent Fiat Group board. In January, Tata shocked the automobile world by unveiling the prototype of the tiny Nano, a car to retail for the equivalent of 2,500 dollars.

In his remarks, Sistino rebuffed talk by Ratan Tata in January of marketing the Nano outside India through Fiat dealers.

Sistino said nothing of that nature was planned. The Nano could not be put on sale in Europe because it would not have all the safety features required under European Union regulations. Nor was Fiat planning to offer the Nano in other nations.

Fiat and Tata sell some products jointly in India and South America and operate a joint-venture factory in India.

Sistino also said that Zastava, the Serbian car company which Fiat is about to acquire, would not take on the budget-car role.

"I don't believe that Zastava will become Fiat's low-price brand," he said.

The Italian company intends to build Fiat-brand cars from 2010 in the Zastava plant. In April, Fiat agreed with the government in Belgrade to take over 70 per cent of the equity in Zastava and to invest 700 million euros (1.1 billion dollars) in the business.

The group needs the additional capacity because its Polish factory is working at full capacity after the retro-look Fiat 500 model scored a big success in sales. Sistino said the current year's output of the 500 had been cranked up from 120,000 to 190,000.

"We are expanding our market share in all countries," he said. "That's mainly because of the 500 but not purely because of it."

Fiat has been hurt by a softening market in its home country, where it scores about half of its western European sales. In the first five months, Italian unit sales weakened by
10 per cent. In money terms, sales also fell.

Sistino said sales outside Italy had grown by one quarter in the same five months, with tax breaks for low-emission cars in France pushing up sales by 50 per cent. "We are the maker with the least carbon-dioxide emissions," he said. "That helps us."

Fiat seeks to win a market share in western Europe of 7 per cent for 2008 as a whole, but Sistino admitted it might fall "slightly" short because of the Italian market's weakness. Last year's share had been 6.2 per cent. (dpa)

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