Fiat is considering launching a low-cost brand to rival Dacia, the Romanian brand reinvented by Renault.
According to a report from Automotive News, Fiat CEO Sergio Marchionne has advanced the proposal for a budget brand to the board. If it will be approved, Fiat’s low-cost cars would be built outside of Europe to reduce production costs. “We are wondering if there is space for a low-cost brand such as Dacia in the Fiat world,” Marchionne was quoted as saying by Automotive News on Sunday.
Although Fiat has enough spare capacity at its Italian plants, Marchionne said the automaker could not make a profit building a car in Italy that would sell in Europe for €7,450. The CEO added Fiat is currently analyzing its production capacity outside Europe to see if a low-cost brand is viable.
It is not the first time Fiat considered a low-cost brand, but so far the plans were blocked as executives feared the business plan was not profitable. The names considered for the brand were Innocenti or names where a combination of letters or numbers linked to the idea of a back-to-basics product, such as ABC or 123.
Fiat’s budget brand is now back in the cards as Marchionne wants to move the Fiat brand more upscale. “We need to see if there is a space left below after the Fiat brand moves up,” Marchionne said.