Next Fiat Panda To Rival Citroen Cactus

During FCA’s most recent five year plan presentation, Fiat was the sole brand that did not have any semblance of a unified direction. While Fiat is decidedly mainstream in key markets such as Brazil and Latin America, it appears that FCA is trying to re-position the brand as something else entirely in Europe and North America. Key to this plan will be an all new, bare bones C-segment vehicle that could end up wearing the Panda badge.

According to the UK’s Autocar, Fiat’s lineup will focus on a series of CUVs in the immediate future, including the Jeep-derived 500X and a variant of the next-gen Jeep Compass. But once those are launched, the next product from Fiat will be

a back-to-basics C-segment hatchback and estate, replacing the unsuccessful Fiat Bravo. These will be based on the same platform as the 500L MPV and will be built in Turkey, where labour rates are cheaper.

Insiders have told Autocar that the new models will not be as “basic” as Dacia’s successful models, but will be “very well priced”. Some rumours suggest that Marchionne will use the well-regarded Panda badge for the Bravo replacement, neatly rebuilding the Panda family as Fiat’s no-nonsense sub-brand.

According to the article, the C-segment, which makes up nearly a third of the EU’s new car market, is plagued by profit margins that range from razor thin to non-existent. High labor costs, consumer demands for advanced feature content and market saturation have all contributed to this situation. While VW’s MQB platform allows for significant economies of scale, their rivals aren’t in the same position. On the other hand, Renault’s Dacia brand can enjoy margins of as much as 10 percent (compared to 2-3 percent on average) thanks to low labor costs, spartan levels of equipment and the use of old, already amortized technology.

The middle ground for mainstream auto makers lies in something like the Citroen Cactus. The Cactus looks chic, but has a number of innovative cost-cutting measures (like rear windows that pop out, rather than roll down) to keep costs down. Fuel efficiency is achieved through reducing weight rather than expensive, advanced technology. If the Dacia is the automotive equivalent of Wal-Mart, then the Cactus is something like H&M – frugal, but now dowdy. The fact that the Cactus uses the underpinings of a B-segment car, but is priced more like a C-segment car doesn’t hurt either.

Following this example for the Panda would be the most logical path for Fiat to take. The Panda name has a lot of brand equity, thanks to its longevity and the widespread acclaim it has garnered from both consumers and the automotive media. Not long ago, it was regarded as the best handling small car money could buy. But in the next half of this decade, the focus will have to shift on creating something that will make consumers consider a Fiat, when there are literally hundreds of other nameplates available. A Cactus competitor doesn’t seem like such a bad start.