Car website AutoCar says a 105bhp version of the two-cylinder petrol engine is in the pipeline, building on the 84bhp unit currently used in the Fiat 500 TwinAir range.
The petrol engine has been widely regarded as a huge breakthrough in engine technology, most notably when the engine was awarded the International Engine of the Year title.
The engine was named as one of the most important breakthroughs by judges, who were impressed by sub-100g/km of CO2 emissions from a petrol engine.
Designed for the Fiat 500 city car, the TwinAir engine has spawned a range of cars in the Fiat 500 range bearing the TwinAir range.
The TwinAir engine, based on the larger MultiAir engine seen in Alfa Romeo cars, reduces CO2 emissions by reducing friction in the engine and making better use of the petrol from the small tank
The Fiat 500 TwinAir range is available from under £11,000 in entry-level specification from all Fiat dealerships in the UK.
Meanwhile, Fiat is planning an all-electric version of the city car for launch in the US as early as 2012, with a view to selling the car in the UK in future years.
The 500EV was first launched as a concept car last year as part of the Italian manufacturer’s purchase of US brand Chrysler.
Earlier this week, Fiat notified the US treasury it will buy the government’s share of Chrysler after a government loan was repayed.
Fiat will own 57 per cent of Chrysler by 2012, leading to technology, engines and dealerships being shared in the US and the UK.