A refreshed Panda and 500L. What Fiat should do next.

Source: JATO

Source: JATO

After the Fiat 500L launch in 2012, the brand has focused on 3 main products: the Panda, the 500 and the 500L. In 2014 they accounted for 56% of the group’s sales, and 74% of the brand’s registrations in Europe. The top seller is the 500, which is also the most international Fiat in Europe. Then comes the Panda, which relies more on Italian market, whereas the 500L is Europe’s best-selling B-MPV, yet its sales took place mostly in Italy. Fortunately the 3 of them continue to be very popular in Italy allowing Fiat to keep its dominant position at the same time the Punto gets old and falls in the ranking. The truth is that Fiat brand now depends more on 3 nameplates that make part of 2 segments that posted a negative growth during 2014 and that counted for only 12,7% of European passenger cars. The brand’s presence in upper segments and SUVs (the 500X is expected to change this) is almost zero, with a Croma that disappeared in 2010, and an old Bravo that died this year. The same seems to happen to the Punto, which this year will turn 10 years old.

This is how it looks the updated Fiat 500 according to Quattroruote. It is expected to be presented in July 2015.

This is how it looks the updated Fiat 500 according to Quattroruote. It is expected to be presented in July 2015.

The Fiat 500 will get an update version in the second half of this year. The refreshed city-car, which will be officially revealed on July 4th, will incorporate a better infotainment system (quite similar to the 500X’s), better ergonomics and some minor changes in the exterior. This top-seller will turn 8 years by that time and it must get some improvements if it wants to continue to lead the A-Segment. Based on the current car life cycles, this restyling should had arrived before. But the popular 500 has proven that it can resist the time and the new competitors, and that a good marketing and communication campaigns, along with continuous tiny updates (colors, trims, versions) can work. However the other 2 popular Fiats, the Panda and the 500L, lack of that vantage and they aren’t ageless. The Fiat Panda isn’t an icon, doesn’t have a unique identity and isn’t chic. The Fiat 500L isn’t the prettiest car and makes part of a bearish segment. They need a restyling right now!

Despite its dominant position (the Panda was Europe's second best-selling city-car in 2014), the arrival of the new Twingo, i10 and Aygo had a negative effect on the Fiat's sales. The Panda is 2 or 3 years older than them.

Despite its dominant position (the Panda was Europe’s second best-selling city-car in 2014), the arrival of the new Twingo, i10 and Aygo had a negative effect on the Fiat’s sales. The Panda is 2 or 3 years older than them.

Unfortunately there is no evidence that Fiat is working on the launch of an updated Panda or 500L, at least in the short-term. It seems that both models will have to wait till 2016 or maybe 2017 for this. Timing has changed in the car industry. Nowadays new cars get old quicker and carmakers work on more updates during the life cycle. The Panda was launched in late 2011 and since then most of all of its competitors have been renewed with all-new generations: the C1/108/Aygo (2014), the Twingo (2014), Smart Forfour (2014), the Opel Karl (2015), Hyundai i10 (2013) and the Suzuki Celerio (2014). In other words the Fiat Panda is along with the VW Up!, Skoda Citigo and Seat Mii, the eldest model of European A-Segment. Its age is quite visible in its infotainment system, which can be an important decision-making issue in this segment. If the Panda isn’t refreshed soon, its demand will be severely affected.

The Fiat 500L makes part of a bearish segment which has been severely affected by the SUV sales boom.

The Fiat 500L makes part of a bearish segment which has been severely affected by the SUV sales boom. Source: JATO

There are different reasons for asking for an immediate restyling in the case of the Fiat 500L. Contrary to the Panda’s situation, most of the 500L rivals aren’t younger than the Fiat. From the European top-10 B-MPVs, only the Nissan Note and Dacia Lodgy arrived in the market after 2012, when the Fiat 500L was launched. The problem with the Fiat 500L isn’t its rivals but its segment: Europeans are not buying as many MPVs as some years ago. The rise of the SUVs demand means the decline of MPVs as seen in recent years figures. In 2014, all SUV segments sales increased 22% whereas Minivans demand fell 0,5%. Of course there has been also a negative effect on other segments, such as the D and E. But looking at the split by sub-segment, it is clear that small SUVs (B-SUV) is getting share from the B-MPVs, while upper segment SUVs do the same to larger minivans. The reason for this shift in demand is explained by the consumers’ needs and preferences. Most of the small SUV buyers are looking for comfort, roominess and a nice look. Normally the MPVs offer the 2 first features, but not the second one. SUVs have the 3 of them. Given this context, Fiat should keep its pole position within the B-MPV segment by updating the 500L and prevent a sales drop with the arrival of the Fiat 500X. A revised version of the Panda and 500L should arrive more sooner than later.

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13 responses to “A refreshed Panda and 500L. What Fiat should do next.

  1. Fiat has effectively turned itself from a mainstream brand into a niche marque by focusing on only two nameplates, the Panda and 500. While this may be an effective way reduce development costs and increase profits per segment, Fiat has significantly eroded its customer demographic which will take years if not decades to rebuild.

    Why Fiat has abandoned the once award winning best selling Punto, in the hottest selling European segment, I will never understand. The death of the weak Bravo (along with its Lancia sister Delta) means Fiat is no longer a player in the C-segment either. A new Punto could have been developed to effectively span the B-C segments, but FCA fails to see the value in it. The 500L is simply a niche MPV product which does not gel well with C-segment customers. And the Giulietta is a bit too premium for the mainstream demographic.

    With the death of Lancia and Alfa’s upscale plans, FCA will have no mainstream products to offer Europeans, gifting the market to Ford, Opel and VW’s three mainstream brands.

  2. I totally agree with Classic Bob. I have always been a huge Fiat fan. My last one being an Abarth Grande Punto esseesse, didn’t particularly like the later Punto. Had to move from Fiat because of lack of product. Would really like to see an Abarth 500X, but will it happen ??? Nothing really exciting to look forward to, very sad.

  3. I also cannot understand why Fiat are allowing the Punto to slowly die, it is still selling surprisingly well (a testament to how good the original design is) and would take very little to revamp to stay competitive in this important segment. And they must renter the B segment as soon as possible. Without competitive products in these two large market segments, a Fiat will struggle to grow as a viable major manufacturer. To mix it with the big boys they will need to offer a full range of vehicles to prevent current Fiat owners migrating to other brands when moving to different segments. Once you lose a customer it is much harder and more expensive to win them back!

  4. A good article and sensible comments above.
    Perhaps Fiat know what they are doing, but the Punto was once Europe’s best selling cars. Why on earth would they just abandon that important sector? Madness.
    It’s a shame Fiat also feels they cant compete against the Golf etc. Look how SEAT has managed to shift lots of Leons and really make a name for itself in the small family hatch sector.
    And finally design is everything, Every time I see an ugly Fiat 500L MPW (Living) my love of Fiat lessens a little.

  5. The next-gen Panda will be a while coming since I suppose it will surely NOT be made in Europe: Turkey perhaps, but one would guess Brazil or India would be better bases for a (pioneering) low-cost car like it is.

    Fiats should completely stop being manufactured in Italy, and should only be exported out of Serbia, Turkey or even India/Brazil to Europe. Italian manufacturing should be exclusively for Alfa, Maserati and Ferrari, and engines/design/marketing etc. Even the 500X only makes sense out of Italy because of Jeep Renegade export volumes outside of Europe, imo.

    i.e., I guess FCA know what they’re doing: Marchionne, a visionary intellectual among businessmen, is now moving into segments they’ve deliberately abandoned in Europe, through the recession years, while everyone else made losses and saw profit margins plummet (VW). The new Linea, its hatch and wagon siblings….but made and even engineered to a large degree out of Turkey, not ‘Europe’/Italy, a Dacia-cum-Skoda fighter family of cars.

    What Fiat needs desperately in Europe, but even more in Brazil and India is the rumoured Panda X crossover, a b-suv, having all the Panda traits (well engineered, well designed, practical, good frugal engines) …yet very cheap. i.e., a dacia duster-type car, much cheaper than the 500X or even the 500L.

    It is rumoured to be under development in Brazil off the Palio platform, and surely needs to be built outside of Europe or even Turkey: in Brazil and/or india, and exported back to Europe. FCA’s international product planners are apparently looking at a Jeep sibling (below Renegade) for it too.

    Ideally, FCA must follow a CUV/SUV-centric strategy,and ensure each new Fiat CUV is twinned with a corresponding Jeep: economies of scale, and therefore margins, and less market-risk.

    IMO there’s a lot of competitive room in Europe and VERY definitely in LatAm and India+Australia+UK etc for a Panda X, a bigger but inexpensive replacement for the Panda 4×4 and Cross, as also for a bigger-than-500X Fiat avatar of the upcoming Jeep C-SUV (Compass replacement). which is happily also on the SUSW platform shared with the Renegade, 500X, new Linea, etc.

    The sooner FCA can get Brazilian and/or Indian and/or Chinese made Fiats and Jeeps accepted in Europe, the better, since Europe/Italy or even Turkey+Serbia would struggle to match the cost/prices/margins for B- and even some C- mass market cars. Esp, given the fact the economic crisis/slowdown is, both globally and especially in Europe, western or eastern, quasi-PERMANENT?!

  6. Guys the demise of the Punto is all part of the bigger picture with exciting new up to date models to come, FIAT know exactly what they are doing and as to the 500L I agree that the MPW Living is ugly but aside from that the 500L is a pretty car and very much bang up to date, in-fact my Wife and family and I like it so much we bought a Trekking in the exact colours of the one above. It’s the best seller in it’s segment by far and the only criticism I have is that FIAT don’t sell it in an auto in the 1.6 diesel for that little extra grunt when needed, it has a great touch screen system that the kids love and it feels very well built and very solid and safe which is what one would want with a family. I’m sure it’s sales will go on increasing as the cute 500 has been doing. My car (Dad) is going to be a 500X when I get the chance to go to my local showroom!!

  7. Fiat and Marchionne were doing just the oposite from French manufacturers and Opel in Europe, and this stuff is going out from unprofitable sectors with hard competition (B, C, D, big limousins), and going to niche classes (500, 500L, now Renegade-500X), and staying tough in italian car specialty (A segment with 500, Panda and Y). Now when car industry in EU seems like going out of the crisis, it will be interesting to see who was right, Marchione or manufacturers with full range of products… ?

  8. Having Two ranges would be good; leisure and chic. The 500 et Al being the Chic range, with the Panda being the leisure range. I would have also call the 500L the 600, leaving the 500 as the city car, the 600 as the super mini, replacing the Punto.
    The ranges would have been;
    City car, 500, 500C, 500 Abarth, Panda
    Super mini 600, 600X, Panda L, 600 Abarth???
    Small Family 700, (full range of hatch & SUV based on Dart platform), Panda XL, (new Freemont).

    Sports car 124 spider ( Mazda MX5).

  9. The Punto and Uno could be used on the Panda range to describe the different sizes

  10. I think that Fiat must be very careful with its key model replacement
    the Fiat Punto. I feel that it is imperative that the forthcoming Punto
    should not have a 500 face, and most important hasten up things
    as regards the hybrid project of the twinair engine which must find
    its place primarily in the said Punto. Somehow Fiat has lost its focus
    on this sector.

  11. Punto maybe name for Indian or ’emerging’ countries market, such as Easten Europe

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