Fiat targets small cars as rival brands jump ship

Fiat will reconfigure its future line-up to focus heavily on small cars, bucking the trend as rival brands move away from city cars and other compact models in the micro, light and small passenger car segments.

According to Fiat boss Olivier Francois, who was speaking to Autocar, the Italian brand will seize on the “opportunity” created with the axing of former top-selling European cars like the Ford Fiesta.

Following the launch of the Fiat 500e, which will go on sale in Australia in 2023, Fiat will launch five new models over the next five years as it shifts eventually into a full pure-electric brand.

The new-model onslaught continues next year with a small hatch built on the CMP platform, which also underpins the Peugeot e-208.

Other cars rumoured include a production version of the well-received 2019 Fiat Centoventi electric concept that will replace the ancient 11-year-old Fiat Panda.

Prompting car-makers to withdraw from the small-car market is the upcoming Euro 7 emissions regulations that will make it harder for manufacturers to turn a profit on smaller cars given the costs involved in meeting the new standards.

Volkswagen is also said to be considering axing the Volkswagen Polo.

In light of the rumours, Francois said: “What we are super-focused at doing is A, B, C [segment] cars but with the right engine, body and technology.

“The stuff the customer will really crave for in that moment. So small cars, but with a smart package.

“The fact that there is no Fiesta in the way or Polo in the way is just fantastic, because it is really where we belong. It’s where people expect us to be.

“We have not done a new Punto since 2013 or something like that, but if you ask European customers to name their top B-segment brands, Fiat is in the top three.

“We need to own the B-segment again, and we need to keep owning the A-segment. We know why the others are leaving, and I understand: it is more challenging.”

Francois admitted that the biggest challenge facing Fiat is making small electric cars affordable because of the “horribly high cost” of batteries.

That has prompted car-makers to position their small EVs as “super-premium”. However, Fiat knows that’s not a solution if it wants to attract traditional Fiesta and Polo buyers.

As a result, Fiat will leverage parent company Stellantis’ economies of scale to produce small cars at an attractive price.

Francois: “Without Stellantis, we would not be in good shape. The Fiat business model or Citroen business model is based on economics of scale. When you trigger the synergies, it’s like being a kid at Christmas, because everything becomes less scary.”

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