Should there be a new Fiat Punto?

The introduction of an all-new Fiat Punto is perhaps one of the hottest topics in the European auto industry in all social media platforms. Fans and haters of Fiat can debate for hours without getting a consensus. From the comments I read in my own Instagram account, I can tell that a big majority believes that Fiat should work on it. However, should there be a new Punto?

The Pros of making a new Fiat Punto

  • Fiat would re-enter Europe’s biggest segment by volume. Although SUVs have been driving growth for the last 8 years, most of consumers in Europe continue to buy small hatchbacks. The B-Hatch segment, where the Punto plays, was Europe’s largest segment by volume with 2.15 million units in 2020. That’s almost 300,000 units more than B-SUV’s volume. A new Punto would allow Fiat to have access to this big quantity of potential clients.
  • More volume to keep the starving plants running. Fiat’s current factories structure was conceived during the 50’s, 60’s and 70’s, when high volume, cheap cars were being produced like hot cakes. These plants still exist and need some fuel. An Italian-made Punto would help.
  • It would support Fiat’s positioning. If Stellantis wants to position Fiat as the small-cars brand of the group, then a Punto is mandatory. Under the new group, Fiat must find its own place among the 14 brands. A new Punto would confirm the positioning of Fiat as a the maker of small, smart, chic cars for the consumers in Europe.

The Cons of making a new Fiat Punto

  • It would not be profitable. More important than volume, Fiat needs to be profitable to secure its existence. In order to have a profitable Punto, Fiat would need to produce and sell many units, and time has changed since the 90’s and early 00’s when the Punto was a winner. Fiat abandoned this segment in 2018 when production ended without a successor, but the Punto started to lose its shine in 2011 as it was rapidly overshadowed by newer competitors. Many Punto clients were forced to move to other brands.
  • There are already four B-Hatchs in Stellantis lineup. A potential new Punto would not play the key role the previous generations played under Fiat Group Automobiles. In case Carlos Tavares decides to bring a new Punto, it would have to deal with internal competition from the Peugeot 208, Opel Corsa, Citroen C3, and Lancia Ypsilon. There is already overpopulation in a barely growing segment. How would a Punto differentiate itself from its mainstream cousins?
  • No potential outside Europe. With the exception of Latin America and India, the rest of the world is not hatch-enthusiast. This situation would leave the new Punto with only one market, Europe, as Fiat already has the Argo to compete in Latin America. For a group like Stellantis, which still needs to do more in Asia, it makes no sense to invest on a car that has no global potential.

My opinion: no way!

I totally disagree with those asking for a new Punto. Although it would bring some volume and relief to the plants Fiat operates in Italy, it makes no sense to invest in a car that would have a very limited sales base and profitability.

Fiat is in dire need of new products, but it does not mean that anything can help. In the best of cases, a new Punto could grab 25% of Italy’s B-Hatch sales and between 2% and 3% of the segment in the rest of Europe. That would total around 150,000 units per year that would certainly help the brand, but would have a negative effect on the sales of the Corsa and 208 in Italy. Does it make sense to complicate things for these models for only 150,000 units in the best of the cases?

Two cases that Fiat would want to avoid by launching a new Punto. A big investment for fewer sales.

I think Fiat must focus on becoming the retro/iconic semi-premium brand of Stellantis by doing what it does best: making cute and useful city-cars. The big mainstream segment should be a job left to Peugeot, Opel and Citroen, which have a better reputation all over Europe than Fiat. Consequently, these three brands should renounce their rights to play in the A-Segment (Opel has already done it) and leave this segment to Fiat. The latter should stop trying to make bigger cars and leave that job to its new cousins.

This is how I think the four mainstream brands of Stellantis in Europe should play. Fiat must attack from below with both, city-cars and A-SUVs. Peugeot, Citroen, Opel would be in charge of the B-Hatchs, and all four brands would have their own B-SUV with a different positioning. The C-Hatchs would be only covered by Peugeot and Opel; and the C-SUV would continue as it is now.

19 thoughts on “Should there be a new Fiat Punto?

  1. Great analysis as always Felipe. Fiat returning to the B segment is seen by fans of the brand as symbolic of its rejuvenation. Unfortunately I think you are right, the numbers just don’t add up. However do you think that a return to the B segment with a premium 500 family model could work in terms of profitability? Maybe this could be the car that the 500L should always have been

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    • Thank you David. It is a good point. However, we must remember that the 500L is only popular in Italy, so any replacement is likely to have a limited effect.

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      • Thanks Felipe. I suppose I was thinking of the rumoured 500 5 door which Quattroruote were reporting last week. I wonder if this car is intended as a Punto replacement. If so, I can’t help but think that Fiat should have introduced such a car in 2012 instead of the 500L. This would have meant Fiat retained a presence in the B segment, and the Punto could have been phased out in 2013, (after 7 years on the market), or repositioned as budget alternative to the 500 B-segment. It would have also fitted in better with 500 branding and market positioning, than the 500L. I know that Marchionne often said that a Punto replacement would not have been profitable at the time, but surely such a car would have sold in greater numbers than the 500L.

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      • It is hard to tell. In 2012, MPVs stopped growing and SUVs were taking off. It proves how bad the planning in Fiat is: they are not connected to the market trends. I still think that instead of a B-Hatch or a B-MPV, Fiat should had worked on a low-budget B-SUV to sit next to the 500X. SUVs drive growth and profits, not Hatchbacks.

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  2. If it was named the 600 and made more chic than mainstream it might work.
    A twin to the more aggressive 208 in the line up.
    In fact FIAT line up should be, as you say just A and B classes.

    500 and 600, with a complement of SUVs to match and maybe even a slightly bigger 600XL 7 seater.

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  3. Well said, however I do think it’s worthwhile producing a new FIAT B-Hatch, most likely as part of the 500 range rather than as a “new Punto”. This would keep it in the retro-iconic niche you mention and differentiate it from it’s Stellantis cousins. It would also serve as a replacement for the Lancia Ypsilon both in terms of market placement and production, being built in Tychy, Poland where Stellantis already produce the PSA engines it would use. Market share in Italy would be maintained (the Ypsilon is the second best seller but won’t maintain that without a replacement in coming years) but it would be exported throughout Europe which the Ypsilon is not. I think it would be profitable, the C3/208/Corsa are profitable so there’s no reason a FIAT derivative wouldn’t be too, especially leveraging the brand image of the 500. There would also be a B-Crossover and possibly related Alfa and Jeep models built at the same plant to share costs. FIAT can’t be left to die producing just tiny city cars which total less than a million sales a year at tiny profits. If Stellantis are looking to cut brands and reduce overlapping models DS and Lancia brands are obvious targets for deletion

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    • It could work as a replacement of both the Ypsilon and Punto. However, I still think that Fiat should concentrate on its citycars and small SUVs

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  4. I believe that a Punto replacement would be a good idea, as previous models shared the same platform as the Vauxhall Corsa/ Peugeot, they seem to be moving in the right direction with both producing ” E ” models & hopefully hot versions of both. M y last Fiat was a Punto Abarth Esse Esse, which I really loved. There was no model to replace it when I wanted to exchange/upgrade ??? I now drive an Audi SQ2, which is ideal for me, fast, comfortable, great driving position, an Abarth equivalent perhaps??? I don’t think so.

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    • But you see? you moved from a hatch to a B-SUV! This is my point. It makes no sense to build hatchs, when consumers are looking for SUVs. If not, why did you buy a SQ2 and not a powerful A1?

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      • As I said at the time when I wanted to change the Punto Abarth there wasn’t a Fiat brand suitable. I am a little older now so comfort/speed, a slightly higher driving position is more suitable. But there is a market for fast “hot hatches” e.g. Toyota GR Yaris, forthcoming Hyundai i20 N etc. etc.

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  5. https://pro.largus.fr/actualites/olivier-francois-jannonce-le-grand-retour-de-fiat-sur-le-segment-b-10239394.html

    According to this article, Fiat said they’re trying to prepare the “Panda Family” including B-segment market. Even though I can’t ensure about C-segment and larger ranges could do well, I thought that “fashionable Dacia Sandero Stepway” approach with Centoventi theme could fit into Fiat’s B-SUV ranges as well as the next 500X. How do you think about Fiat’s “Panda Family” idea – especially whether it’s viable for Stellantis era or not?

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    • Yes, both a 500/600 range and a Panda family would suit Stellantis Group.

      The Panda family would cover the Dacia market, while the 500/600 could easily become the chic brand.

      All the brands need to have some overlap and offer customers differences in styling, for example SEAT, Skoda and VW all offer similar cars with slightly different styling to give a choice.

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    • Fiat is always saying many things, but at the end of the day, there are no cars. I don’t believe in their product launches plans anymore.

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      • Felipe…FCA is over… you should put a brake in your disbelief…
        Of course there should be a new Punto!
        Think about VW Group, how has it become so big?
        Planning, quality… but also economies of scale and regional presence/awareness
        Think about Polo, Ibiza, Fabia…almost the same car… but many spanish buyers buy a SEAT because it is a spanish brand and would probably not buy a VW… the same goes for Skoda.
        Do they care about overlap? No! The fixed costs related to the project have already been spent … platform, engines … if you can divide them by several brands and models, the better.
        What were Seat and Skoda or even Audi a few years ago? VW had to invest in unknown/unpopular brands Stellantis will bring 208, C3, Corsa, Punto more differentiated than the models of the vw group.
        Italy is stil a very important market that buys Fiat. It they achieve a good design (the engeneering is already good) other markets can accept Fiat, like it happens with Fiat 500.
        And like Skoda, Fiat shoud have a wider range of cars, not just minicars and smal suvs…shared with Peugeot/ Citroen, completed with some niche italian specialities….shared with Abarth…
        More difficult in my opinion to create a business plan for Lancia… it should obligatorily contemplate the reinterpretation of historic vehicles like the Delta, Fluvia…

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  6. I would like to understand you better on why can´t we compare VW and Stellantis.
    In my opinion, now, more than ever, the competition will begin…
    In EMEA Stellantis can catch VW Group easily – sort of. A true competitor for Audi will take some time, but it`s achievable.
    In Asia Stellantis it will have to stuggle a lot… to arrive closer… two decades will not be enough.
    In US it`s the opposite, I belive Stellantis will raise its advantage.

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  7. This question illustrate why FIAT is loosing ground for years.

    Let’s put the question that way : if you are a popular carmaker should you propose a successor to a product which was a success on a segment sought after by consumers on your primary market ?

    The answer is obvious and the fact that the profitability might not be that confortable is secondary on that issue.

    Keeping a business running is also about staying in touch with consumers, keeping market share and expand visibility to gain more clients not just about short term profitability (this absence of a “big picture” strategy is probably the main weakness of FIAT).

    The Punto was a success for FIAT, it kept the brand visible and in touch with young drivers from the middle class (who might be in line to buy a 500X after the Punto) so it was obviously a reckless move for the company to discard it.

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