July 9, 2012 / 9:30 AM / in 5 years

Renault's Clio revamp takes "Latin" swing at Fiat

Workers leave the Revoz factory that produces cars for Renault in Novo Mesto March 24, 2009.Srdjan Zivulovic

PARIS/MILAN (Reuters) - Fiat's bosses might feel flattered by their French rival Renault's new Clio, which practically shouts "viva Italia". But with nothing new of their own to match it, the Italians are in no position to boast.

The new version of Renault's bestseller, with its black concealed door handles, two-tone interior and low-slung look, is an homage to Italian style. And that spells more trouble for Fiat, which won't have a new Punto for at least two more years.

The revamped Clio, previewed in flashy red and yellow on Renault's website, will challenge Fiat's Punto and 500 models when dealers in France and Italy begin taking orders next week. It joins an updated Volkswagen Polo and a new Peugeot 208.

"All the main Punto competitors have had replacements, but Fiat is falling further behind," said Philippe Barrier, an auto analyst with Societe Generale, who noted that the new Renault is "very fluid, a bit Italian, with a more aggressive front end."

The fourth-generation Clio - a "faux-coupé" five-door that looks like a sportier three-door - is the first complete design by new style chief Laurens van den Acker, hired from Mazda three years ago to make the fading Renault brand sexier.

He is aiming for a "more Latin, more sensual" style for Renault, to distinguish the namesake brand from the "Germanic, functional" aesthetic of the firm's own low-cost Dacia marque, he said last week. The new Clio is all French, he insisted, but he doesn't mind the Italian comparisons.

"Renault is a French brand, and France is a Latin country, so it only made sense for us to look for inspiration in French elegance and human and Latin sensuality. True, Italian brands are inspired by the very same things, and I am delighted to see that the new Clio conveys almost Italian emotions."

There are certainly plenty of flourishes that will be familiar to Fiat admirers.

Those concealed door handles? They were a signature feature of Fiat's Alfa Romeo 147 and its successor, the Giulietta. The two-tone dashboard is reminiscent of a retro-styled Fiat 500. There's even a choice of custom roof graphics, a feature of the 500, as well as of the Citroen DS3 and BMW's Mini.

The Clio, built in France and Turkey, will sell for around the same price as the last five-door model, starting at 14,550 euros in France, compared to 7,900 euros for a Romanian-built Dacia Sandero. Renault sold 302,000 of the previous Clio in Europe last year; Fiat sold 210,000 Puntos and 157,000 500s.

HARD TIMES

Renault and Fiat have both hit hard times in Europe, with sales falling even faster than the overall market's 7.3 percent slump so far this year, losing customers to Volkswagen and South Korea's Hyundai-Kia.

But if Renault's answer is to invest in a sexier look, Fiat's response has been to hold back on new designs until the market improves. That means a few more years of tough sales conditions for its Punto, last overhauled in 2005 and not due for a refit until 2014.

Fiat has warned it may have to close another plant unless production picks up, while also outlining plans to stave off catastrophe by exporting Italian-built cars to the United States, where it controls Chrysler.

Chief Executive Sergio Marchionne said last week Fiat has no choice but to postpone a replacement Punto until almost the 10th anniversary of the design - overshooting the typical product cycle of six or seven years.

"If the Italian market stays as it is, launching the Punto now would be a huge failure," Marchionne said. "We'd never be able to repay the investment."

The only new Fiat subcompacts in the pipeline are tweaks to the 500 range launched five years ago. The firm is targeting 100,000 sales of its Serbian-built 500L, a roomier version of the 500, to be introduced in September, priced from 15,550 euros, compared to 12,590 for a five-door Punto.

A crossover-styled 500X will follow in late 2013.

"They'd better make it nice, because it's all Fiat has coming," said London-based UBS analyst Philippe Houchois.

"There might seem to be good reasons to delay a product until the market picks up," Houchois said of the decision to delay the new Punto.

"But what kind of support will you get if you starve your dealers for years then suddenly want them to push something?"

Editing by Peter Graff

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