The company has no immediate plans to introduce luxury cars like 'Alfa Romeo' in the domestic market.
"The car codenamed 'Small' will be launched in Europe in the second half of this year. It might be launched in India after that, depending upon the results of clinic tests," Montanari told PTI in New Delhi.
Montanari would succeed M P Bianchi as the Fiat India chief on January 27, 2003. He said the car would be built on an entirely new platform and also sport newly-developed 1200cc turbo-diesel and 1100cc and 1200cc petrol engines.
The diesel engine, Montanari said, could also be used by US automaker General Motors as part of a global alliance with the company's Italian parent Fiat Spa.
General Motors holds 20 per cent stake in Fiat Spa. "In India, we will have to understand the possible volume, the possible cost of production and its positioning before deciding to produce the car," he said.
He termed the domestic car market as very competitive as the "pie is not so big but there are many players".