Fiat Revives Study of Low-Price Brand

Fiat SpA is again considering whether to add a budget-priced vehicle line that would compete with Renault SA's Dacia brand in Europe.

CEO Sergio Marchionne tells a forum in Italy that the idea would be to create an entry-level brand with vehicles base-priced at €7,450. He says such models might find room at the bottom of the company's lineup as the Fiat brand shifts upmarket.

Last year Marchionne announced that the Fiat Group aims to improve profits and expand domestic production volumes by expanding the lineups of its premium marques and edging many of its brands into higher-margin market segments.

Fiat Group has ample capacity in Italy to build a new low-cost line of vehicles. But Marchionne says production would likely occur outside Europe, where manufacturing costs are lower.

Fiat has pondered a low-price brand for years. Automotive News Europe says deliberations had stalled because of worries that a budget line would generate volume but no profit.

The online newspaper notes that Marchionne's renewed interest may reflect moves by several other competitors Nissan's revived Datsun brand, for example to use low-cost models to build sales in emerging markets.