Just a day after Fiat and Ford had announced (on Monday) that they would build a new small car together, the CEO of Ford Italy hinted during a newspaper interview that the agreement will be extended beyond its deadline, while other models could also be brought into the equation.

The deal will see Fiat and Ford co-operating on the development and manufacturing of a new "sub B-segment" car. For Fiat it will help to cut costs as they seek to fulfill a long standing desire to create a modern day version of the iconic '500' model, while Ford will use the joint venture to replace the existing, ageing range of 'Ka' models. The new car will be built on the existing Panda's floorpan and use Fiat engines, and so it is a massive vote of confidence in the technical and engineering abilities of the Italian carmaker - which has struggled somewhat in recent years - and in Fiat CEO Sergio Marchionne who has now pulled off a deal with one of the world's biggest automobile manufacturers, and in the process firmly banished all memories of the unproductive previous alliance they had with General Motors.

It is also a major boost for the Polish car industry as the new Panda-based car will be assembled at a brand-new factory which will be located in the Southern City of Tychy, already home to the Panda and Seicento models. With a capacity of 300,000 units per year the existing facility is too small to absorb the new car's production, which is slated for annual production of around 240,000 units.
 

Although assembly of the tiny Seicento model will be phased out very shortly, the existing Panda will then take up most of the slack, especially as a raft of new variants - including an SUV and "sports" version - are due to hit the market in the next couple of years.

Meanwhile, Massimo Pasanisi - the Chairman and Chief Executive of Ford Italy - told the Italian newspaper Il Messaggero in an interview yesterday that "the alliance will last for the whole life cycle of the new Ford Ka and so it will go well beyond 2010." Strongly hinting at the possibility of further platform sharing between Fiat and Ford Pasanisi added that: "For now, we are collaborating on only the new Ka, further ahead, we will see, we are not excluding extending it." Ford Europe are closely targeting the Italian market for a much-needed sales drive, and the collaboration with Fiat is being seen as shedding a very positive light by Ford Italy. With a market share of just over 7 percent last month Ford are one of the three big players in Italy, just behind the German VW Group, although the pair are well adrift of Fiat Auto, who claimed a 28.05 pct share of their home market last month.