DETROIT – Chrysler Group LLC is contemplating plans to equip a new C-segment car with a 4-cyl. engine from partner Fiat Automobiles SpA, Ward’s learns.

The auto maker’s product strategy calls for the introduction in 2012 of new C-cars for the Dodge and Chrysler brands. One or both could feature a turbocharged version of the 1.4L FIRE engine scheduled to debut this year in the North American-market Fiat 500 B-car, according to an informed source.

If approved, it could be the first Chrysler application for the FIRE engine.

Officially, the auto maker is mum on discussions to migrate the storied Fiat engine to the Chrysler lineup. But Paolo Ferrero, senior vice president-Chrysler powertrain, concedes the I-4 has capability that extends beyond the B-car segment.

“We can move up to bigger vehicles as long as we can have higher torque and low-end torque,” he tells Ward’s during a break at the 2010 SAE International World Congress. “There is no particular limitation.”

Fiat sells an Abarth-badged 500 variant powered by a 1.4L turbocharged FIRE engine with a peak torque rating of 170 lb.-ft. (230 Nm) – a notable jump from the performance associated with I-4s in Chrysler’s current C-car, the Dodge Caliber.

The ’10 model’s 2.0L and 2.4L engines feature peak torque ratings of 141 lb.-ft. (191 Nm) and 165 lb.-ft. (224 Nm), respectively.

When Chrysler announced in December that its engine plant in Dundee, MI, would produce FIRE engines for the 500, CEO Sergio Marchionne also promised the boosted engine would generate 170 hp.

Tapping Fiat for an I-4 is consistent with Chrysler’s stated commitment to leverage the Italian auto maker’s expertise with sub-2.0L engines.

And the return of a sub-2.0L engine to Chrysler showrooms – the auto maker dropped a 1.8L I-4 from the Caliber lineup for ’10 – is consistent with Chrysler’s strategy of replacing larger-displacement engines with smaller, turbocharged mills.

The market is rapidly trending in this direction. General Motors Co. today reconfirms plans to equip its new C-car, the ’11 Chevrolet Cruze, with a turbocharged version of its 1.4L Ecotec I-4. Rated at 138 hp and featuring peak torque of 148 lb.-ft. (200 Nm), it will enable the Cruze to achieve 40 mpg (5.9 L/100 km) in highway driving.

And Ford Motor Co. in March confirmed its next-generation Focus lineup will include a performance-oriented model for global markets powered by a 4-cyl. version of the auto maker’s EcoBoost technology.

Meanwhile, Ferrero says no determination has been made about using the FIRE brand in association with Chrysler vehicles. The name, which stands for Fully Integrated Robotized Engine, enjoys a strong reputation in Europe, he adds.

The first FIRE engine, which featured a displacement of 0.8L, dates back to the 1980s. The current 1.4L configuration features the largest displacement to date.

Chrysler’s Dundee plant also will source FIRE engines for Fiat 500s destined for Latin America. The 500 will be assembled at Chrysler’s plant in Toluca, Mexico. Chrysler executives have hinted at total volume in the range of 100,000 vehicles.

The 500’s debut in North America will mark the unveiling of Fiat’s trademark MultiAir valve-actuation technology that reduces harmful emissions while also boosting fuel economy and performance.

The 2-shift site is Chrysler’s sole source of 2.0L and 2.4L World Engine production for the Caliber, the Dodge Avenger and Chrysler Sebring midsize cars, and the Dodge Journey, Jeep Patriot and Jeep Compass cross/utility vehicles.

Built in 2004 as a joint venture involving Mitsubishi Motors Corp. and Hyundai Motor Co. Ltd., the Dundee plant is designed to accommodate annual production of 840,000 engines.

Chrysler now is the sole owner of the site, having bought out its partners in September 2009.

The auto maker said in December it was investing $179 million to tool up a separate line to accommodate FIRE engine production.