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?
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.