Fiat Expects Low-Cost Compact Car Family to Mimic Dacia's Success

The first car in the family will be a sedan called the Tipo. The four door, three-box sedan will be frugal and practical just like Dacia's Logan sedan and Sandero hatchback but both Dacias are subcompact models.

The Tipo will compete in Europe's compact segment where Dacia does not have an entry.

The sedan will have no direct rival, said Alfredo Altavilla, Fiat Chrysler's chief operating officer for Europe. "It will be a test for the market because the [affordable compact] segment in Europe basically does not exist."

The Tipo will be positioned as an affordable roomy, five-door car at the lower end of Europe's compact segment. Fiat has not released pricing for the car but reports said it likely will start at 12,000 euros.

Altavilla said Fiat is getting good reaction for the car. "We showed it to Italian dealers, it went pretty well," he said.

Fiat unveiled the Tipo as the Aegea sedan concept at the Istanbul auto show in May. The sedan will go on sale in Turkey starting in November, then in Italy in December, followed by a gradual rollout in 40 countries in the automaker's Europe, Middle East and Africa region.

Fiat will debut hatchback and station wagon variants at the Geneva auto show in March. Fiat has not disclosed the production names of these variants.

The sedan will replace the Linea and will compete against cars such as the Peugeot 301 and Skoda Rapid in eastern Europe and Turkey where sedans are popular. The hatchback will replace the Bravo and mainly sell in western Europe in the segment led by the Volkswagen Golf.

Fiat has not sold a wagon in Europe since the Stilo Multiwagon was discontinued in 2008.

The cars will be based on Fiat's small wide platform that also underpins the Fiat 500L minivan and 500X crossover, as well as the Jeep Renegade.

The compact family will be built at Fiat's Tofas joint venture plant in Turkey. Tofas has said it will build a combined 700,000 units of the range over the life cycle of the vehicles until 2023, mainly for export. IHS Automotive predicts that production of the three body styles will peak at 124,000 during 2018.

Europe profitable

Meanwhile, Fiat Chrysler is likely to be profitable in Europe this year, Altavilla said. The automaker returned to the black in Europe in the last quarter of 2014 and turned a profit in the region in the first half.

"Unless something incredibly ugly happens, I am quite optimistic based on sales results that we are on track to be profitable for the full year in Europe," he said.