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