FIAT Auto and Suzuki have signed a memorandum of understanding for the joint development of a new sports utility vehicle.

Announcing the move at a conference in Budapest, Fiat Auto president Giancarlo Boschetti and Suzuki chairman Osamu Suzuki stressed that the new vehicles will have a 'distinctive styling differentiation'.

Production of the new SUV vehicle, which will be based on the new Suzuki A-segment platform, will start during 2005 at the Magyar Suzuki Corporation facility in Estergom, near Budapest in Hungary.

It will be produced as a five-door vehicle powered by diesel and petrol engines. It will be distributed through the companies' own dealership networks.