Fiat has said it will set up a production line in Poland to produce its new reduced-emission MultiAir engines.

"We are in the process of setting up a branch for this project in Bielsko-Biala," Fiat Auto Poland spokesman Boguslaw Cieslar told the AFP news agency.

Cieslar declined to confirm a report in the Polish daily Rzeczpospolita that Fiat was investing an estimated 400 million euros (500 million dollars) in the new facility, which would produce 500,000 engines a year.

Fiat and US giant General Motors currently run a joint operation in Bielsko-Biala which produces Fiat GM Powertrain diesel engines.