Fiat is expanding its Tychy plant in Poland to increase capacity for the new 500 by 40-60,000 units a year.

According to a local press report Fiat will invest around EUR275m in the plant, and the same again next year.

By 2009 Fiat will be able to produce half a million cars a year in the plant.

Fiat launched the new Fiat 500 in July this year. A spokesman said the expansion is necessary as orders have already exceeded capacity.