Chrysler to invest in Michigan engine plant

Fiat SpA has announced that it will build a new, more fuel-efficient engine for Fiat and Chrysler vehicles at a plant in Dundee, Mich., near Detroit.

Production of the 1.4-l, four-cylinder engine will begin in the fourth quarter of 2010. It will power the Fiat 500 minicar, which will be made in Mexico and will go on sale in the U.S. in 2011. It will eventually replace engines in other Chrysler vehicles.

The engine's variable valve timing system, which was developed by Fiat over the last five years, improves fuel efficiency by 10 percent and reduces emissions by 20 percent, the company reports.

Turbocharged and direct-injection versions also are in the works, which will allow the engine to replace some of Chrysler's V-6 and V-8 engines.