Fiat Auto strategy had planned for the 2005 Punto to replace the current Project 178 Palio family hatchback. But Fiat Auto Managing Director Giancarlo Boschetti has included a "new Palio" in the restructuring platform strategy presented to financial analysts. 

Besides the "new Palio," Boschetti also disclosed that Fiat would like to team with GM on replacements for the Fiat Stilo and the next-generation GM Astra, which aren't due for several years.

Up to now, Fiat's aim was to launch a restyled Palio in 2003, prior to using the 2005 Punto a a basis for the new "World Car". However the restyling project has now been canceled and the current model will run through until 2006.

THE WORLD CAR PROJECT

Fiat Auto invested more than €2.4 billion in the 178 world car program. The Palio hatchback was launched in April 1996 in Brazil. Later the same year the Palio Weekend Stationwagon and Siena saloon versions were added to the range. This was completed in 1998 with the introduction of the Strada pickup, all models on the same platform.

The Palio hatchback and stationwagon were restyled in September 2001 and a wider and longer car, the Albea, replaced the Siena in April. A restyled Strada will be introduced at the end this year. 

Fiat aimed to build 1 million Project 178 cars a year starting in 2000, but economic crises in several countries where the cars are made - Argentina, Brazil, Turkey and Poland - have prevented Fiat from reaching the target. Fiat has built slightly over 2 million 178 models. The peak was in 1997, when 442,000 units were built. 

Besides Argentina, Brazil, Turkey and Poland, the Palio family is built in China, India, Morocco and South Africa. Plans to produce it in Russia were abandoned in February after four years of negotiations with the Russian automaker AvtoGAZ. Market conditions were unfavorable.