Motor Trend reports that Lancia isn't headed for the scrap heap after all. Chris Brown, a spokesperson for Chrysler, told MT the automaker will live on and continue to manufacture its Ypsilon hatchback in Italy. The remainder of the brand's vehicles will be built in America by Chrysler. What's more, Fiat CEO Sergio Marchionne has said future Lancia models will be co-developed with Chrysler. That's a big shift from what we heard last week. As you may recall, the German site Automobilwoche reported the sun was poised to set on the Lancia brand for good, due in part to economic woes in Europe.

Under the rumored plan, Fiat would then push Maserati farther downmarket to help fill the gap. As it turns out, Marchionne was simply talking about further platform sharing between Fiat and its profitable American brand. That means we can likely expect to see more Lancia-badged Chryslers prowling the streets of Europe very soon.

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