Italian carmaker Fiat Auto has adjusted its production plan with Guangzhou Automobile (Group) Corp to stage a comeback in the world's top vehicle market.

Fiat Auto China said in a press release last week that it will begin production in China in the middle of 2012, a year later than the previous plan announced last July.

The first Fiat model to be produced at its 50-50 joint venture with Guangzhou Automobile will be an all-new compact model specially designed for the Chinese market - not the Linea announced earlier, it said.

The new model will be equipped with a 1.4-liter turbocharged engine and a dual-clutch transmission.

The Italian carmaker will introduce five new models into the joint venture in Changsha over the five years beginning in 2012, Fiat Auto China said, without providing details.

Fiat plans to raise the production capacity of the joint venture.

According to a five-year plan revealed by Fiat Auto's global CEO Sergio Marchionne last month, the Italian carmaker will have an annual production capacity of 300,000 cars, up from 250,000 units planned for the partnership last year.

The new China production project comes after Fiat withdrew from a tie-up with Nanjing Automobile Corp at the end of 2007 following many years of poor sales and losses. The failed partnership, formed in 1999, produced the Fiat Palio, Siena and Perla models.

Analysts said the failure was largely due to the Italian carmaker's slow response to Chinese customer needs, a lack of competitive products and strategic disputes with Nanjing Automobile, which was acquired by China's top auto group SAIC Motor Co in 2008.

Fiat is now importing several compact models into China, including the Linea, Grande Punto and Bravo. Its sales in the nation dropped by 62.5 percent to just 454 units last year, according to market data.

The figure is negligible compared to other carmakers with massive production in China. Germany's Volkswagen Group, the biggest passenger car producers in China, moved more than 1.4 million cars in the country last year.

Analysts said it is crucial for Fiat to resume high-volume production in China as soon as possible in an effort to catch its rivals.

A spokesperson from Fiat Auto China last week declined to comment on recent domestic media reports that it is considering production of Chrysler models at its joint venture with Guangzhou Automobile.

The troubled US carmaker, bought by Fiat a year ago, halted production of its cars at Daimler AG's joint venture in Beijing in 2008 after the breakup of Chrysler and the German group.