In 2000, General Motors and Fiat formed an alliance in which the GM gained 20 percent of the Fiat’s shares in exchange for 5.1 percent of its own stock. The two companies jointly developed the Gamma platform for B-segment cars that underpinned the 2005 Fiat Punto and the 2007 Opel Corsa.

Sergio Marchionne commented during the Detroit Motor Show that Fiat and Chrysler would be “willing participants” if General Motors wanted to discuss Opel tying up with another manufacturer.

On Monday, Marchionne said that European carmakers should be ready for “another round of consolidation”, fuelling rumors about a possible merger with PSA Peugeot Citroen. Marchionne dismissed the rumors the following day: “I saw (Peugeot CEO) Phillipe Varin last night for dinner, and the topic was not on the table”. He did not, however, completely rule out any tie up, since he added that “We continue to be open to suggestions and opportunities.”

GM vice chairman Steve Girsky who also had dinner with Marchionne said that the Fiat-Chrysler CEO did not discuss the possibility of an Opel tie-up. In any case, Girsky stated that “Opel is not for sale”, adding that GM is “committed to returning our European business to sustained profitability. There’s a lot of work to do.”

The Fiat Group CEO, Sergio Marchionne, admits that his company is facing huge troubles in Europe as in the first nine months of 2011, the company’s sales decreased by 12% compared to the same period last year, with its share in the European market dropping from 8.2% to 7.3%.

Even in its home market of Italy Fiat sales for the first nine months of the year have hit their lowest mark in the past 20 years.

Marchionne does not have any delusions that next year the situation will improve: “2012 will not be a great year for the European market”, he told reporters. “Since 2008, Italy has lost 700,000 cars, which for Fiat means a loss of 210,000 cars. There is no point in looking for new models”, he added.

Today Fiat-Chrysler alliance’s biggest profit contributors are the U.S. and Brazilian markets, and that’s where it will focus its efforts. Marchionne denied, however, reports that Fiat will leave Italy, despite losing money – and fast.

At this point, all of Fiat’s five Italian plants are loss making. The management wants more flexible labor deals and increased productivity, something the worker unions react to, with the FIOM metalworkers’ union organizing a strike on Friday.

“It’s a very bad idea”, commented Marchionne on the strike. “It’s certainly no way to encourage investments in Italy.”

Good news for Fiat fans: the small Panda car has reached a 1,500,000th example of the model on the Poland plant in Tychy. The vehicle is a left hand drive car in magnetic blue with a 1.3 MultiJet engine that is destined for an Italian customer. The today generation Panda was unveiled in 2003 and winning many awards including the European Car of the Year 2004 title.

The Panda, which formed that base for Fiat’s 500 retro city car, has been exported to 74 countries including Japan, South Africa and Mexico.

Fiat has revealed that it will use the Zastava plant to produce the upcoming Topolino microcar. The vehicle will be based on the same platform as the FIAT 500 and Panda, but even smaller and positioned below either model, and share the same name as the concept car that previewed the new 500 and originally used on the 1936 runabout pictured above. According to reports, the new Topolino will be a compact two-seater measuring just 3150mm (124 inches) in length, slightly longer than the Smart ForTwo at 2692mm (106 inches). A four-seater version is expected to follow, in addition to an upscale version for the Lancia division.

Fiat’s Chief Technology Officer Harald J. Wester has confirmed news that FIAT is developing a new low-cost car.

The new low cost B-compact car, which will replace the Palio family range in world markets, will bridge the gap that has grown up between the A-segment Panda and the B-segment Grande Punto, a divide that has stretched with the upward push achieved by the latter model when it was introduced two years ago. The B-compact model, dubbed as the ‘new Uno’ will spawn a ‘Weekend’ (estate) version.

The second vehicle, tentatively carrying the same “Topolino” name as the concept which previewed the new 500, will be a microcar based on and positioned below the Panda, with both expected to hit the market around late 2009 or early 2010.

Wester also held out that the B-compact model could be launched under a new brand name.

Fiat plans to reveal its low cost car somewhere in 2010. The new cheap Fiat will be an even smaller car than the 500 and Panda. The new model would be a low-cost vehicle targeted at markets in South America, Russia, India and China.

If the company decides it will wear the Fiat badge, it could revive the Uno nameplate and effectively replace the Palio (pictured above), which currently serves as Fiat’s “world car”, with production in Brazil, India, Turkey, South Africa, North Korea and China, in hatchback, sedan, wagon and pickup body-styles. Fiat’s close relations with Tata, makers of the Nano, could come into play, but one way or another, nobody does small cars like Fiat, so the competition had better take note.

The new low-cost Fiat will help with the company’s position in markets such as South America, Russia, India and China. It’s not known yet whether the new low cost car will be Fiat-badged or not, as there is a possiblity of a new brand being used. Fiat is still conducting internal studies on whether a low cost model could damage Fiat’s image.

Fiat is moving production of Alfa Romeo cars to the United States. Such a move would save money for Fiat, which is suffering from the relative strength of the euro against the dollar, and mark a return of the Alfa Romeo brand to the United States after withdrawing it in 1995. Fiat planned to start North American production of Alfa cars by 2011 or 2012.

Fiat is already talking to Detroit’s major carmakers about sharing production of Alfa Romeos in the United States.

Fiat, which recently returned to profit, is also looking to return its Iveco trucks division to the United States and offer the relaunched Fiat 500.

Fiat, which has owned Alfa Romeo since 1986, stopped exporting the car to the United States in 1995. General Motors held a stake in Fiat until 2005, when it refused an option to buy the company, paying a $2 billion penalty.