Fiat might take on Smart with new even smaller car

Fiat is apparently considering a production of a new mini-car to challenge the Smart ForTwo and upcoming city cars from Volkswagen and Toyota. The latter two companies will be displaying concept versions of their models at the Frankfurt Motor Show next week. The Fiat would likely share a platform with the Panda and 500 but be shorter still. At 3.2m the new car would undercut the 3.55m-long 500 but still offer seating for four. The Toyota and VW are expected to be 3.15m and 3.4m long respectively.

Unlike the other two, Fiat won't yet show a concept version although that could come next spring at Geneva. Fiat will however show a new 65hp two-cylinder engine in Frankfurt that will probably go into the new car. Production of the Fiat will likely start in 2009 or 2010 but all these tiny cars have another problem: profitability. Whether any of these manufacturers will be able to build these cars with the equipment that's expected on modern cars such as stability control and airbags and still make money is very much an open question. That's important because all the companies will need to sell plenty of these cars in order to bring their fleet average for CO2 emissions down.

[Source: Automotive News – Sub. Req.]