Chrysler Group LLC said on Monday it would introduce an all-electric Fiat 500 to the U.S. market in 2012 and drop plans to develop a hybrid 2011 Ram pickup truck.

The electric Fiat 500 will hit the U.S. market at least a year after the all-electric Nissan Leaf, which is to debut in late 2010.

As it was announcing work on the Fiat 500, Chrysler also said it was dropping plans to develop a Ram pickup truck for 2011.

After closely evaluating the response to hybrid pickups in the marketplace, the company could not formulate an appropriate business case and has decided to cancel development work on the 2011 Ram HEV, Chrysler said in a statement.

Chrysler, based in suburban Detroit, is managed by Italy's Fiat SpA.

Almost five months ago, Chrysler disbanded a team of engineers and its Envi -- short for environment -- program in favor of a more traditional organization.

That was a reversal of a program highly touted earlier in 2009 as the automaker sought a $12.5 billion federal aid package.

The electric Fiat 500 will follow the introduction a conventional combustion engine Fiat 500 in the U.S. market in late 2010.

(Reporting by Bernie Woodall; Editing by Derek Caney)

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