Fiat is quitting the minicar segment it dominates

Fiat plans to exit the minicar segment its global empire is built on. Strict safety and emissions regulations looming over the European new car market will soon make developing pocket-sized models prohibitively expensive, so the Italian firm will shift its attention to the next segment up.

“In the very near future, you will see us refocus on this higher-volume, higher-margin segment, and that will involve a move away from the minicar segment,” announced Fiat Chrysler Automobiles (FCA) boss Mike Manley during a recent conference call with analysts. He didn’t provide a specific time frame, but industry trade journal Automotive News speculated the move will happen by 2024.

The 500 and the Panda, Fiat’s entries in the segment, continue to sell relatively well in spite of their age. The 12-year old 500 was the 16th best-selling car in Europe in 2018; the eight-year old Panda finished in 20th position, but it led the Italian sales chart by a significant margin. Fiat already announced the next-generation 500 — which likely won’t be sold in the United States — will only be offered with an electric powertrain, but the current car is expected to remain in production for as long as possible. The Panda’s future is murkier; the 2019 Centoventi concept hinted at an electric replacement, but Manley’s statement seemingly suggests Fiat shifted the project to the back burner.

The next-generation 500 will make its debut at the 2020 Geneva auto show and go on sale shortly after. While the model will live on as an electric car, Fiat will focus on slightly bigger subcompact cars that enjoy thicker profit margins, like the Renault Clio and the Volkswagen Polo, Europe’s second and third best-sellers (behind the Golf) in 2018. The Italian firm left the segment when it deep-sixed the Punto in 2018; it’s now looking for a way back in. The on-going tie-up with Paris-based PSA Group would give it access to the new platform found under the Peugeot 208 and the Opel Corsa. It was developed with gasoline-, diesel-, and electric-powered drivetrains in mind.

Fiat’s rivals on the European market have recently come to a similar conclusion. The Ford Ka+ and the Opel/Vauxhall Karl retired earlier than expected, decisions partly blamed on sluggish sales, and Volkswagen will allegedly drop the gasoline-powered variant of the Up! to focus on the electric model. Smart’s ForTwo and ForFour have gone electric-only. Profit margins in the minicar segment are so thin that making a new generation of gasoline-powered models compliant with future regulations would mean selling them at a loss.

Motorists who want (or need) a minicar aren’t entirely out of options, though; the segment still includes the Renault Twingo, which is built on the same rear-engined bones as the aforementioned ForFour, as well as the Peugeot 108/Citroën C1/Toyota Aygo triplets. All are due for replacement soon, and their future is currently up in the air, but it most likely involves a headstone or a plug.

Exiting the minicar segment would represent a huge about-face for Fiat. Tiny economy cars like the first 500 (colloquially called Topolino) unveiled in 1936, the rear-engined 500 released in 1957, the 126 that took the torch from it in 1972, and the original Panda unveiled in 1980 were sold by the millions in Italy and abroad, and they helped turn Fiat into a worldwide powerhouse.

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