Fiat and Ford have confirmed that strategic discussions have been taking place between management representatives of Fiat and Ford of Europe on whether it might be advantageous to both companies to pursue joint development of a future “A segment” (also described as “sub-B” segment) car in Europe.

These discussions have been progressing positively, to the point where both parties have signed a Memorandum of Understanding.

The two new vehicles that would be involved, with highly differentiated designs, would be a new Fiat 500 and a replacement for the current Ford Ka.

By working together on this project, both companies would envisage reduced development and material costs, while providing highly competitive products to the marketplace.