Fiat careful not to repeat Stilo mistakes

As Fiat works on the successor to the Stilo, it is being careful not to commit the same mistakes it made with the failed sedan, according to the Italian automaker's brand and commercial manager.

Luca De Meo said the new model, yet to be named, would be everything the Stilo was not.

Hailed in 2001 as the car of Fiat's future in the mid-size market, the Stilo was supposed to have been the automaker's answer to the Volkswagen Golf. But it turned out a flop and became a catalyst for the sharp decline at the auto division two years later.

Mr De Meo said Fiat had since worked on improving the design, fixing the electronic problems, and reducing the number of built-in extras that had priced the Stilo out of its category.

"We are trying to do everything that is contrary to what we did with the Stilo," he told Reuters at an award ceremony on the weekend in this town southwest of Milan.

Fiat also hopes it will have more luck with the timing of the new model's launch in early 2007. When it rolled out the Stilo in September 2001, the world was still in shock from the attacks on the United States.

As for the new version of the 500 or Cinquecento, scheduled for release in September 2007, Fiat has set up a website (www.Fiat500.com) inviting fans of the tiny car to submit ideas for its design. Mr De Meo likened the site to Linux, the computer operating system whose source code is open to the public to add, change and use as they see fit. Of the more than 2.5 million hits the site has received since its launch two weeks ago, Fiat has culled 40,000 recommendations for the new version, he said.

"Before, we used a top-down approach, telling people, so to speak, what we thought was best," he said. "But we've decided to change that around.

"People want to contribute," he added, glancing at the scores of vintage Fiat models parked by members of the 500 club in front of the stage set up for the award ceremony.

Named after the man behind the 500, whose birthplace is in the town of Neive, the Dante Giacosa award is given to the engineer deemed most to have worked in his spirit.

Last weekend, Mauro Pierallini took the award for his work overseeing the development of Fiat's new Panda.

The new 500 will be built on a platform for small cars being jointly developed by Fiat and Ford at a plant in Poland.

It is due to come out in September 2007, in time for the 50th anniversary of the original model.

These two cars will be the latest in a series of new models including the Grande Punto that have revitalised Fiat's sales as the automaker undergoes a massive restructuring.

Sales have been so strong in the last four months that Fiat has not only outperformed its home market but also made a strong showing in Europe.

This has led to Fiat's auto division posting its second quarterly trading profit in a row earlier this month and doubling its profit forecast for the year.

It has also seen Fiat's stock trade at levels last seen before its crisis in 2003.

On Monday, however, the stock fell to a two-month low, leading European carmaker stocks down as investors took profits and reduced risk exposure. The drop came on the same day as Fiat unveiled its latest Ducato van, the product of an industrial alliance with PSA Peugeot Citroen.

Analysts also remain sceptical about the sustainability of Fiat's sales momentum.

They doubt the ability of a few models to revive the industrial group and expect Fiat's sales to lose speed as rivals like PSA Peugeot Citroen bring out the latest versions of their own models later this year.