Alfa Romeo will build a new car to compete with the Mini Cooper S, according to an automotive trade newspaper.

Company sources told Automotive News Europe (ANE) that the car would be a three-door hatchback based on the Fiat Grande Punto platform.

The car would become Alfa's new entry model from 2008. Alfa aims to sell 60,000 to 80,000 units a year of the car, which will revive the name Junior.

Alfa expects the Junior to boost its annual global sales to 300,000, the figure which the loss-making Italian brand says it needs to break even.

Alfa sold 126,000 cars globally last year, down from 153,000 in 2004 and 203,000 in 2001. Its all-time peak was 229,700 sales in 1989.

The Junior would be a high-performance sporty model with a 230hp turbocharged, petrol direct-injection 1.8-litre engine.

Alfa Romeo is expected to build it in Fiat Auto's Mirafiori plant in Turin where the new car would share an assembly line with the Fiat Grande Punto, which started production there in late May.