After Fiat Grande Punto and Fiat Linea, Fiat is going to launch a brand new model, The New Fiat Small Car in 2012. With Tata Motors, New Fiat Small Car will develop a small car and launch it by end of 2011 or early 2012.

The cost of the Fiat small car is between Rs. 3 Lakhs to Rs 3.5 Lakhs. The on-road price is approximately Rs. 4 Lakhs depending on locations. By the time of launch, the tax rules and input cost may change so the actual prices may increase marginally.

Fiat expects to get its product across to a much larger set of consumers and to effectively raise its market share from the present 1.5% with this car. To make it the best suitable for the Indian consumer, the model is currently being worked on by the R&D team. FIAT will have a presence in the most volume generating segment and will have a sure chance to compete for high volumes after the model is launched in the country. Fiat 500 Mini car derives the small car which is considered as a world iconic car from Fiat.

A petrol engine less than 1200cc in capacity with power output nearly 80BHP is featured by this car to keep the car in the cheap pricing and to take full advantage of the tax and excise benefits in India. To keep in small car tax segment, the overall length of the car will be smaller than 4000mm. New Fiat Small Car has a 4 door car with seating capacity for 4 passengers. It is estimated that the car will deliver decent fuel efficiency at this size of car and the engine capacity.

Rajeev Kapoor, MD, Fiat India told ET, “It will be an all-new car, nothing to do with any of our other models and will be priced aggressively. It will compete with the Alto and will have a one-liter engine. The new car will be an India-specific one, made in India, made for India, keeping in mind the country’s unique terrain and temperatures. Our R&D team is working day in and day out to develop the car that meets consumers’ needs in the best manner.” Fiat added: “The small car market in India is blazing and there is intense competition. The entry level car space excites us.”

Says Rahul Verma, director and head, quantitative research, Synovate India, “Fiat would have to ensure the widespread availability of cheap spares. Although the company has sorted out the distribution problem with the tie up with Tata Motors but will have to spread its authorized workshops to aid efficient after sales service, a critical aspect in India.”

Agrees Abdul Majid, PwC: “The Indian small car market demands companies to better their distribution and after sales service network. Also, the company will have to localize the product better than its competition. This aspect will be key.”