Italian carmaker Fiat is working on a successor to the Palio, a hatchback sold in emerging markets, Chief Technology Officer Harald Wester said in an interview with a German car magazine.
"We are working on a low-cost concept in our development centre in Brazil," he said in an interview in the latest issue of Auto Motor und Sport.
Fiat, a market leader in Brazil, would also make and sell the car in countries like China, India and Russia, he said.
"We want to sell it globally in various growth markets," he said. "(What is) especially important is the strengthening of our position in South America in addition to covering new markets like India or Russia."
Fiat would have to make at least 100 000 units a year to make it worthwhile to have it produced locally in the target countries, he said.
Palio's successor would be based on the platform for the Panda model but be slightly bigger, he said.
Fiat was aiming to have it on the market by 2010 at the earliest and was considering selling it under a different brand, he added.
Wester also confirmed Fiat was working on a car that would be smaller than the new version of the Cinquecento (500), which has had a lot of success since its launch last July.
The tiny car would be ready by the end of next year, he said.
Car makers are hurrying to bring small cars to market as the trend moves away from big cars and sports utility vehicles due to rising fuel costs and growing concern about pollution.