Fiat will build a "baby" Jeep in Italy to sell in Europe and possibly also the United States, two company sources told Automotive News Europe.
The Jeep will be smaller than the brand's current entry SUVs, the Patriot and Compass. The model will be produced in Fiat's home plant of Mirafiori in Turin, alongside a similar vehicle for Fiat brand that will replace the Sedici and an Alfa Romeo subcompact car for sale in Europe and North America.
Fiat had initially planned to build in Mirafiori the replacement for the Jeep Compass and Patriot and an Alfa SUV that would have shared systems and components with the Jeep model.
The change of strategy implies that the single model to replace the Patriot and Compass and its Alfa sibling will be manufactured in the United States. Jeep currently builds the Patriot and Compass in Belvidere, Illinois.
Fiat declined to give details on which models will be built in Mirafiori as part of a refurbishment of the factory, but the automaker is developing smaller models to meet an increasing demand downsized vehicles, especially in Europe.
In a statement issued on Monday, Fiat, which controls 53.5 percent of Chrysler Group, said it will remodel Mirafiori to build the most updated version of one of its three main architectures on which different nameplates for its various brands will be produced.
Development of the manufacturing infrastructure will begin in 2012 and production of the first nameplate, a Jeep SUV, is expected in the second half of 2013, it said.
The architecture to be installed in Mirafiori is internally called SUSW. It is a wider, U.S.-compliant version of Fiat's European Small architecture, which will debut next spring on two small minivans that Fiat will produce in Serbia to replace the Idea and Multipla models.
Fiat's group executive council made the production decisions for Mirafiori at meetings on Friday and Saturday, reversing a plan first announced in December 2010 to install in Mirafiori the bigger CUSW architecture.
CUSW is a wider, U.S. compliant version of Fiat's European Compact architecture that debuted last year on the Alfa Giulietta compact hatchback.
The first model to use the CUSW architecture will be a Dodge compact sedan that will replace the Caliber and will be unveiled in January at the Detroit auto show.
Mirafiori currently builds the Alfa MiTo 3-door subcompact, as well as the Fiat Idea and Lancia Musa small minivans.
Fiat-Chrysler CEO Sergio Marchionne said in a statement that refurbishing Mirafiori "is an important step in our plans to re-industrialize our Italian manufacturing backbone in view of current market developments and the increased distribution reach provided by Chrysler Group."
He added: "This leading-edge architecture will allow us to provide the most updated platforms for the development of our brands, and more importantly, will allow us to access the full powertrain offerings of both Fiat and Chrysler."
