Fiat Punto Supermini Replacement Is a Huge Problem for the Company

Punto Abarth 6 photos
Photo: Fiat
Fiat 500XFiat Punto AventuraFiat PuntoFiat PuntoFiat Punto Avarth
Fiat's now famous 5-year plan seemed like an open and shut case when they revealed it. They just need to separate their cars into mass market volume models and premium ones that have better profit margins and a distinctive set of features, a bit like selling no-brand jeans with Levi's in the same store.
But in a recent interview with CarAdvice, the Fiat brand chief Olivier Francois suggested the company is having a hard time with the replacement for the Punto supermini. As is usually the case, the Italians find coming up with a new design very easy. Concepts have already been built, but the market case just isn't there yet.

We're talking about a volume car that fights in the most competitive segment of the European market. Fiat's sales have been plummeting the past few years and the Punto replacement needs to be profitable. But its rivals, Francois says. aren't.

“B-segment is the worst thing in this moment. We have seen, it’s extremely competitive – our competitors do great cars. Let’s face it. The [Renault] Clio is a good car, the [Peugeot] 208 is a good car, the Citroen [C3] is a great car. They’re all good,” he said. “So what are we going to do better, and why would we make money where they lose money. They all lose money. So once we have the beautiful object, what do we do?”

Better rivals

Sure, Fiat has won many awards for its TwinAir two-cylinder turbo engine, but customers have been slow to accept and buy it. The official may have deliberately avoided comparing the Punto with the VW Polo and Ford Fiesta, both of which are selling very well. In September 2014, the Fiesta was the second best seller after the Golf with 38,516 units sold, an increase of 9.3%. The Polo facelift was the third best seller overall with 32,939 the same month, an increase of 8.1%.

Even though its sales dropped 6% in September, the Renault Clio is still the third best selling car overall in Europe with over a quarter of a million delivered in 2014. All signs point towards the new Opel Corsa performing well after its major updates.

Most these rival superminis have features no Fiat has yet implemented, like active safety features which are now crucial for a good crash safety rating, improved phone pairing and internet connectivity and premium car options like twin-clutch gearboxes.

The Punto is now an only child

The official admitted that sharing costs with other brands is crucial to lowering the break even point. The 500X small SUV is going to do well because it shares its underpinnings with the Jeep Renegade, he believes, but finding a sister car for the Punto is going to be altogether more difficult.

Remember, lightness is crucial to achieve good fuel economy in the supermini class, as are advanced engines. Volkswagen Group has already added cylinder deactivation and brake energy recovery to some of its models. However, unlike in the past, Fiat is pretty much alone now in development of its supermini. The Lancia brand has become a one car brand that only plays in the local Italian sandbox, while Alfa Romeo is too busy with its premium sedan to work on a fresh MiTo at the moment. Dodge, Chrysler or Jeep superminis? Never gonna happen!

New Punto: is it going to be a 500 or 600 model?

Despite numerous reports that suggest a 5-door version of the Cinquecento will replace the Punto, this decision has not yet been made. The company may not want to risk overusing the 500 brand, which may destroy its value.

“I think there’s still space for a couple of models, but we have to be careful. We have to see two things – is the 500X going to be the success we expect, and if so, maybe, you know, surveys, clinics, speaking with customers [to see] how many more we can do before taking a risk on the brand equity,” Olivier Francois told CarAdvice.

What he isn't pointing out here is that the 500L MPV model seems to have had a negative effect, as most people are claiming it has nothing to do the brand and some suggesting it's a bad car altogether. Both the regular 500 and the 500X can be considered premium products, which the Punto replacement definitely won't be one.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram
About the author: Mihnea Radu
Mihnea Radu profile photo

Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida.
Full profile


Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories