Fiat is considering whether it should develop a low-cost passenger car similar to ones made by French rival Renault.


Fiat chief executive Sergio Marchionne, who spoke to The Associated Press (AP) at the Geneva motor show, said the company was considering its own low-cost model similar to the Renault Logan, made for the French automaker by Romanian subsidiary Dacia.


The cars are also produced in Colombia, Iran, Morocco and Russia with plans to make them in India announced in 2006, the news agency noted.


Even though Fiat already has its Palio, a hatchback sold mostly in emerging markets and made in several countries under joint venture agreements, Marchionne reportedly said that there was a clear demand for such an inexpensive vehicle.


“Our low-cost vehicle will be the new version of the Palio,” Marchionne told AP.


Toyota president Katsuaki Watanabe also told the news agency his company had developed its own low-cost prototype but said it was not ready to launch because it had not decided where to develop and build the model or where to sell it.


Fiat Indian joint-venture partner Tata Motors expects its ties with Fiat to strengthen, its chairman, Ratan Tata, told the Associated Press.


Speaking in Geneva, the executive, who also sits on Fiat’s board, said, “Fiat and Tata can do many things together, working in various geographical areas and using various shared platforms.”


“I’m sure we can develop our cooperation as we go along,” Tata told the news agency.