The Fiat-Tata combine is developing a new small car to be launched by 2010, a possible replacement for the Palio. The recently-announced 50:50 JV will initially focus on Fiat’s B and C segment cars, Grande Punto and Linea, to be launched next year and the production of 1.3 litre multijet diesel engine, 1.2 and 1.4 litre fire gasoline engine and transmissions.
The Ranjangaon facility will have a capacity to produce 100,000 cars and 200,000 engines and transmission. “The Palio will need a replacement and the JV has already started work on the development of the new small car, “reported economcitimes. The Tata-Fiat JV is currently producing and marketing only the Palio petrol versions (1.1 and 1.6 litre). The other Fiat models — Palio diesel and the mid-size car Petra/Siena — have been discontinued. In the last one year, the JV has progressed in line with expectations, officials said. While the JV has focussed largely on improving marketing and distribution, Palio sales have climbed, nearly doubling to 1,702 units in April-September 2007 as against 923 units in the previous year.Palio has been a slow mover among the pack of small cars. Tata Indica sold 68,468 units and Hyundai Santro and Getz sales stood at 80,604 units in April-September. The compact segment has grown 16% in this period. The JV will manufacture passenger cars, engines and transmission with an overall investment of 650 million euros for the Indian and overseas markets. The name of the JV is expected to be announced at the end of this month.

source:economictimes