Fiat hikes production of 500 minicar to 200,000 units

Fiat has boosted production of its popular 500 minicar to more than 200,000 units annually in response to increasing European demand for fuel-efficient compacts.

"Capacity for the 500 is now over 200,000 units a year," Fiat group CEO Sergio Marchionne said last week in a conference call with analysts.

Fiat now plans to sell 195,000 units of the popular 500 during 2008.

The Italian carmaker initially planned to sell 120,000 units this year. High demand for fuel-efficient small cars saw Fiat lift the target to 140,000 units earlier this year.

Fiat booked 230,000 dealer orders for the 500 between the car's July 2007 introduction and the end of its June 2008 reporting period, the company said.

The company said it sold 94,000 units in the first half of 2008.

Market researcher Jato Dynamics said the Fiat 500 was the Europe's second best-selling minicar over the January to May period, with 76,533 units sold.

The 500 was second to the Fiat Panda – the segment leader since 2004 – which sold 101,645 units in the first five months of the year, Jato said.

The Renault Twingo was the third best-selling minicar, with 59,855 sales over the January to May period.

Fiat launched the 500 in mid-July in India, where a 98 percent import duty has transformed the high-volume minicar into a premium model.

A 1.3-liter, 75hp diesel 500 in India costs the equivalent of 22,500 euros, compared to 14,750 euros in Italy.

Pricing is expected to limit demand and volume for the 500 in India. "This is a lifestyle product. We expect to sell a few hundred cars in the next 12 months," said Rajeev Kapoor, CEO of Fiat India Automobiles.

Fiat India Automobiles is a joint venture between the Italian automotive group and India's Tata Motors.

Tata open to Fiat selling Nano cars

Indian carmaker Tata Motors is open to Italy's Fiat helping to sell the ultra-cheap Nano model overseas, Chairman Ratan Tata said on Tuesday.

Tata, India's third-biggest carmaker, plans to launch the Nano later this year, priced at about $2,500.

"We have held talks about the Nano being marketed in markets where Fiat has already a strong presence. I am open to consider a partnership," he told a news conference at a forum promoting cooperation between Italian and Indian companies.

Fiat has a joint venture with Tata to manufacture and distribute cars, engines and commercial vehicles.

Tata also said the Tata group was in talks with Italian defense and aerospace company Finmeccanica about supplying helicopter parts.

Fiat Chairman Luca Cordero di Montezemolo said the company was in talks with Tata about making buses and trucks.

"We'll see if there are the conditions for us to go forward," he told reporters on the margins of the forum.

The head of Fiat's Iveco truck unit told an Italian newspaper in May he expected to resume talks with Tata on possible accords after the India partner completed its acquisition of Jaguar and Land Rover.

Cordero di Montezemolo also said he was "very optimistic" about second-quarter results due to be released on Wednesday.

Analysts polled by Reuters have forecast that Fiat would post an 11.4 percent rise in group trading profit, despite the worsening car market in Europe, thanks to strong sales in Brazil and support from its truck and tractor businesses.

Fiat shares closed down 0.92 percent at 10.432 euros as the DJ Stoxx auto index was flat.