Fiat LogoFiat has picked Serbia to be the production base for its new low-cost car. It will use Zastava’s former plant in Kragujevac, Serbia, with an initial capacity of 200,000 units a year, with plans for this to be upped to 300,000 units from 2010 onwards. Fiat will invest a sum of 700 million euros into the production line, and the Serbia will contribute 200 million euros through tax breaks and incentives.

The first model to be built at the Serbian plant will be called the Fiat Topolino. Fiat had a car called the Topolino back in the 1930s, and it was a two-seat minicar. The new Fiat Topolino will be based on the Fiat 500 and Fiat Panda’s platform, and will be a shorter vehicle than either of the two vehicles at 3150mm long. The Panda currently measures 3538mm long, and the Fiat 500 about 3550mm long. An upscale variant of the Topolino will be marketed under the Lancia brand. Topolino means “little mouse” in Italian.

It was previously reported that Fiat might revive the Uno or Palio name for a new low cost car program. Fiat announced that from 2010 onwards, a new low-cost car project currently codenamed the B-compact family will be produced at the Serbian plant. This should be the new low cost car, but no name was revealed.

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Fiat to develop new low-cost car