Alfa Romeo Fiat ChryslerChrysler Group reportedly is planning to build a new small car capable of 40 mpg in a bid to boost its corporate fuel economy average.

The new car, to be built at the company's Belvidere assembly plant in northern Illinois, will be based Fiat's C-EVO platform and replace the aging Dodge Caliber, the Detroit Free Press reported, citing unnamed sources familiar with the plan.

The new model will be marketed as a Chrysler, but the company's Jeep brand may also get a version of the vehicle. It will resemble the Alfa Romeo Giulietta (pictured), which Fiat introduced in Europe earlier this year.

Chrysler is one of the least fuel-efficient automakers in the U.S. market. The Auburn Hills, Mich.-based automaker needs a high-mpg car to help meet new federal mandates that require automakers' fleets to average 35.5 mpg by 2016.

Fiat owns a 20% stake in Chrysler and is seeking to boost its share to 35%. But the Italian automaker must meet certain goals, including boosting fuel economy, to do so. The other steps relate to production of a Fiat-designed 1.4 liter four-cylinder engine for the 2011 Fiat 500, and increasing Chrysler's sales outside the U.S., the Free Press reported.

The new engine will be produced at Chrysler's Dundee plant in Michigan and installed in Fiat 500 models assembled in Mexico. The engines may also be shipped to Belvidere for use in vehicles produced there.

Chrysler is spending $150 million to retool the Dundee facility, and is seeking as much as $10 billion in loans from the Department of Energy for new-engine development, Reuters reported Wednesday.

In addition to meeting new stringent standards, a gas-sipping small car would help Chrysler better compete against rivals General Motors and Ford Motor (F), both of which have introduced new fuel-efficient cars this year capable of 40 mpg.

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I have a better idea for Chryslers new 40 mpg vehicle; why don't they just import the Fiat alfa romeo vehicles, especially the Giulietta model's with both gas and deisel versions. They are ideal cars for the american driver; frugal (40 mpg+),sporty, well made and performance minded. Please SEND them over soon! By the way, I did purchase a Dodge Colt (wagon)and thought the Mitsubishi car was a good one. But that was in the 70's, not 90's... Aso owned a Mits made 91 Eagle Talon TSI Turbo for 9 years. Most fun auto I have ever driven. ( all wheel drive, Auto) And the only car I put over 100K on.

November 02 2010 at 7:49 PM Report abuse rate up rate down Reply

Chrysler once had 40-miles per gallon vehicle in the 90's. Those vehicle were called "Dodge Colt & Plymouth Colt." They were 2-doors hatchback, built by Mitsubishi with price tag ranging from $9,995 to $14,000 and up for the loaded ones. So, 40-MPG vehicles for Chrysler is NOTHING new!

October 28 2010 at 2:53 PM Report abuse +1 rate up rate down Reply

The thing about new vehicles these days is that they are so loaded with electronic garbage junks. You can no longer make spare keys without having to rely on driving to the rip-off-robbing dealership with their $250 price tag for a spare key. Then when you open up the hood, you can't barely stick your finger or find the location of the spark plugs due because they are covered with loaded electronic sensors, electronic harnesses, computer for this, computer for that, computer for here, computer for there, and computer for everywhere! Whenever something fails, the culprits are usually points to the countless electronic garbage junk and not the mechanisms. These engineers are not here to solve problems, but to create, engineer, and discover electronic manufacturing problems so they could milk the consumers with their $150 an hour service labor and over gouging and over priced hardware parts! You can call it "securing job security" but I call it "Malicious ROBBERIES of the New Age!!!"

October 28 2010 at 2:44 PM Report abuse +2 rate up rate down Reply

I have a 1995 Jeep Cherokee. It has been very reliable and has 160,000 miles plus on it. Just routine maintainence items that every car gets at tome point. I still love the car and it breaks my heart I cannot buy a new one, I would just get blue this time.

October 28 2010 at 11:53 AM Report abuse +1 rate up rate down Reply

If this automobile got 75 mpg I would NEVER buy a chrysler. Better buy 2, so you have a ride while the other one is in the shop.

October 28 2010 at 10:59 AM Report abuse +2 rate up rate down Reply
1 reply to lumleyq45's comment

Our Dodge Trucks run fine, you really need two 2 Tundra's one just to use parts to patch the rust from the other one.

October 28 2010 at 7:50 PM Report abuse +2 rate up rate down Reply