Fiat Tipo set to dramatically undercut its rivals

Fiat’s new Tipo saloon and hatchback will be significantly cheaper than any rivals when they arrive on sale in the summer of 2016.

A Fiat Ireland insider said: "There's no point in trying to take on the Golf, because you saw what happened when we tried to do that with the Stilo. So this is going to be a different proposition. It's big, it's well-made and comfy, and it will be a lot cheaper than the main opposition. And I don't just mean €200 cheaper, I mean a significant chunk of money."

The new car is seen as a potential tipping point for Fiat as it tries to break back into the European mainstream market of compact hatchbacks and saloons. For some time now, the Italian firm has relied on the small 500 and, more recently, the 500L MPV and 500x crossover to drive its sales.

While those models have not been without success, neither have they set European sales charts alight and Fiat's combative chief executive Sergio Marchionne has rarely missed an opportunity to remind us that the mainstream car market in Europe is savagely cut-throat and astonishingly difficult to mine a profit from.

Low-cost base

The Tipo though will arrive with the advantage of being built in low-cost Turkey, at the Tofas factory in which Fiat has made a significant investment. That low-cost base should allow Fiat to trim the Tipo's price to a pretty tempting level and the Italians are keen to carve out a niche in Ireland similar to what Renault managed in 2009-2010 with the big-car-small-price Fluence, albeit without the savage discounting that led to disastrous residual values.

When it arrives here, the Tipo will be equipped with a choice of 1.4-litre and 1.6-litre petrol engines and two diesels: a 95hp 1.3-litre MultiJet and a 120hp 1.6-litre MultiJet.

The Tipo is already racking up some success – it has found 1,000 Italian customers prepared to put down an advance order for one, while Fiat claims that it has another 20,000 inquiries about the car.

However, it's not all rosy – this week Alfa Romeo has revealed it is pushing its new model range schedule back again. Although the new Giulia saloon is still on course to be launched next year, the follow-on models (including two SUVs and a new large saloon) will now be delayed from 2018 to 2020 before they go on sale.

Delayed

While the Tipo949 and Tipo962 SUVs (think of them as BMW X1 and X3 rivals) are still on schedule, the timing of the larger saloon (thus far called Tipo961) and other models, including a new coupe and convertible and a new hatchback to replace the Giulietta, have all been delayed.

Fiat is blaming the sluggish Chinese car market for the delays, but said that it still expects to expand its sales to 400,000 units a year by the time all the new models are available.