Fiat is planning to expand the use of its new 900cc turbocharged two-cylinder motor, offering the TwinAir power plant in three states of tune and, potentially, rolling it out into bigger models than the 500. The first TwinAir version, rated at 84bhp, will be launched in the Fiat 500 in September. It will be priced alongside the 99bhp, 1.4-litre petrol four-pot whose performance it matches, while undercutting its economy by 30 per cent.

The other planned TwinAir outputs are 64bhp, which coincides with the basic 1.2’s output, and 105bhp, which slightly exceeds that of the current 1.4-litre petrol. Fiat says the units will appear in other marques, most likely Lancia. Insiders say they are unlikely to power Alfa Romeo, Abarth or Chrysler group models.

In a Fiat 500 powered by the 84bhp TwinAir, driving through the Dual Logic automated manual gearbox, the combined fuel consumption is 69mpg. The TwinAir engine is made in Poland and will ramp up rapidly to a production rate of 400,000 units a year. It will go in the economy versions of all Fiat’s small cars. Insiders say it may be offered in the Focus-sized Bravo if customers can accept such a small engine in a big car.