Lancia is to progressively replace the Chrysler name throughout Europe by the end of next year, with the exception of the UK.

Citing the development as a strategic move to return to profitability, the Fiat division said the process was ongoing.

No firm date for final integration has yet been announced but a Fiat spokesman told just-auto the move was likely to be finalised before the end of next year.

No change will occur in the UK as Fiat has not marketed Lancia here since the company stopped making right-hand drive vehicles some years ago.

“Lancia will replace Chrysler for all the European market except the UK,” the spokesman in Italy said.

“The reason for the change is strategic. In terms of synergies, it is our intention [it is] the best way to return to profitability in the mid-term.

“All the dealers in Europe will be affected. In Italy we have already started – it is a big job.”

The move forms part of Fiat’s ambitious plans to expand its retail operation by 30% to 1,600 by 2014.

“We are convinced it fits better for the European market,” added the spokesman.