GENEVA -- Fiat is targeting the lower end of the compact car segment with its new Tipo hatchback and wagon, the company's top executives said at the auto show here.
The Tipo family "represents value for money in its best possible expression," Fiat Chrysler Automobiles CEO Sergio Marchionne said.
Alfredo Altavilla, FCA’s Chief Operating Officer for Europe, said the Tipo is aimed at the "ultra rational, post crisis European buyer."
Fiat brand's strategy in Europe is to position its range in two market segments - aspirational models such as the 500 model family positioned at the upper end of their segments and value-for-money vehicles in the lower price bracket.
After expanding its aspirational range over the past 10 years with minivan and crossover versions of the 500 and the 124 roadster, Fiat is now ready to expand its lineup of affordable cars.
The Tipo emphasizes practicality, comfort and affordability, Fiat said.
Altavilla explained the reasoning behind Fiat brand's positioning by saying sales of aspirational cars in Europe have risen 26 percent over the past 10 years and by 27 percent for value-for-money cars, while sales of mainstream models have declined by 76 percent.
The wagon and hatchback join the Tipo sedan to give Fiat its first compact competitors in Europe since the brand stopped production of the Bravo in 2014. Fiat has not sold a station wagon in Europe since the Stilo MultiWagon was discontinued in 2008.
Fiat claims the hatchback and station wagon have a class-leading trunk space at 440 liters and 550 liters respectively. The rear seat will fit three passengers of more than six foot in height, the brand said.
Engines will include three diesel engines starting with a 1.3-liter four cylinder and three gasoline engines. The 1.6-liter 120hp diesel has CO2 emissions of 98 grams per kilometer, Fiat said.
The Tipo models are based on Fiat's small wide platform that also underpins the Fiat 500L minivan and 500X crossover, as well as the Jeep Renegade.
All the Tipo models are built at Fiat's Tofas joint venture plant in Turkey. Tofas has said it will build a combined 700,000 units of the range over the life cycle of the vehicles until 2023, mainly for export.
IHS Automotive predicts that production of the three Tipo body styles will peak at 124,000 during 2018, with European sales topping out at 90,218 in 2017.
"I think the direction they're taking with it, a cost effective, space orientated option, is Fiat's best hope in the segment,” IHS analyst Ian Fletcher said.
The Tipo hatchback will go on sale in May and the station wagon in September. No prices have been announced for the cars, but the sedan is currently sold in Italy during its launch phase for 12,500 euros ($13,600), which represents a reduction of 2,000 euros over the base price of 14,500 euros. The carmaker said it already has 20,000 orders for the Tipo sedan.