Fiat Grande Punto 1.3 MultiJet 90 3dr

The new Fiat Punto is a very appealing supermini that's big on design flamboyance, but could be still more refined. John Simister takes to the road and finds it a little flawed

Model: Fiat Grande Punto 1.3 MultiJet 90 3dr
Price: £10,500 approx (range will start at approximately £7,800)
Engine: 1,248cc, four cylinders, 16 valves, 90bhp at 4,000rpm, 148lb ft at 1,750rpm
Transmission: six-speed gearbox, front-wheel drive
Performance: 109mph, 0 to 60mph in 11.6 seconds, 61.4mpg official average
CO2: 122g/km

Small car, big event. The launch of a new Fiat has an effect on a city somehow greater than that of any other car, particularly when the city is Turin - the epicentre of Fiat and the Italian industrial north.

Security is everywhere. Acrobats dressed like monochromatic Spider-women somersault down from the ceiling. The sound system throbs with the highest of fi. Grande Puntos emerge, zapped by green laser strobes. And Fiat president Luca di Montezemolo, in a speech, likens the Grande Punto's style to the curves of a beautiful woman who will have no difficulty in finding a husband. Good thing he wasn't making this speech in the US.

Small car: Grande Punto? Truth is, the new Punto is big by small-car standards; the biggest in supermini-world. It's big enough to make you question the need for anything bigger: you can get a family of four in here easily, and a credible amount of luggage in a boot with a hidden compartment under its flimsy mat. Adding Grande to the name also differentiates the new car from the previous Punto, which will continue to be on sale for another six months, even while the Grande joins it in the UK in February.

But one aspect of the Grande is surprisingly small, and it shows how the centre of gravity is shifting among European buyers' choices of engine. The biggest available petrol engine is just 1.4 litres in capacity, with a 1.2 beneath it. It falls to the diesels to bring muscularity, with a 1.9-litre, 130bhp engine to power the fastest Punto and a 120bhp version of the same unit (an oddly small distinction) also offered. The two other diesels - both of them Fiat's 1.3-litre MultiJet units, which are the world's smallest diesels - also upstage the petrol engines. One makes 75bhp; the other a very impressive 90.

So, what about these "feminine curves"? The low nose, formed out of a single giant bumper/grille moulding, has a touch of Maserati Coupé/Spyder about it - Giugiaro was responsible for all of them. Chamfered corners and huge, tear-drop headlights help disguise the front overhang, and the sloping bonnet flows into the laid-back windscreen with barely an angular break. This means the windscreen's base is pulled well forward, so much so that there are little MPV-style quarterlights ahead of the doors and the mirrors are set well back, mounted to the upper flanks by stalks.

The waistline rises steeply as it heads rearwards, and the tail-lights flank the rear window, as they have in all three Punto generations. And inside... what a cornucopia of colours and trims, spread across four basic trim levels (designated in Italy as Active, Dynamic, Emotion and Sport, although "Emotion" may wisely be renamed for the UK). It is a roomy interior, and the rear seat folds flat to make a bigger boot. But only five-door Puntos get a split-fold facility, while only the three-door Puntos get grab-handles above the front side windows. Unusually for nowadays, these aren't damped and they spring home with a tinny thwack. That, and the resonant clang of the five-door models' rear doors when pulled shut, slightly spoil the effect of the obvious solidity elsewhere.

But then this is not an expensive car. It should cost about the same as, or little more than, the corresponding current Punto, so the fact that the cabin is short of soft surfaces is forgivable, if not admirable. Meanwhile, the Punto confirms the death of the typically Italianate, short-legs-long-arms driving position; if anything, the steering wheel is a bit close, even when telescoped right away. It's adjustable for height, too, as is the driving seat.

So, to the road. The previous Punto was a decent, if unmemorable, drive, but Fiat promises great things of this one. It has electric power steering as before, complete with a "City" button to increase assistance at town and parking speeds, but this time it's one of the best electric systems I've experienced. It feels best and most natural in the 1.9 JTD, with its relatively heavy nose; smooth, accurate and confidence-inspiring. It helps make this Punto rather more fun to drive than the last one, along with changes to the suspension design, which add to the steering's responsiveness and to the tail's keenness to help the nose round the bend. The new Punto has a particularly smooth, level ride on bad roads, too.

But there are downsides to Fiat's new baby. All three versions I drove had snatchy, over-servoed brakes, which is an affliction spreading among new cars like a contagious disease. And this 130bhp, eight-valve diesel, with its hefty 207lb ft of torque, might propel the Punto with easy, deep-chested vigour, but it's a boomy, noisy engine and its matching six-speed gearbox has a shift too imprecise across its movement.

The 90bhp 1.3 MultiJet diesel, whose 148lb ft of torque is mighty impressive for such a little engine, is a smoother, quieter unit, but it still pulls well, albeit with some response lag, while the turbocharger spins up to speed. But its steering feels more obviously assisted than the 1.9's and is less well-matched to the car's weight and responsiveness. But it makes for the most rational real-world Punto choice, with spectacular fuel-economy potential.

That said, my own favourite is the 1.4-litre petrol version, simply because it's the smoothest, quietest and sweetest, and it still moves nippily enough. It makes do with five gears against the diesels' six, but it has a broader spread, if a smaller helping (77bhp), of power and you're not left craving another gear.

If the range seems a bit unbalanced at launch, it will be fleshed out with some more petrol engines later on. A Punto Sporting will arrive with a 95bhp, 16-valve version of the 1.4-litre engine next year, and 2007 will see an ultra-rapid Abarth model with 220bhp and twin turbo-chargers. Fiat is still considering whether to make a convertible, but if it happens it will probably be a soft-top, rather than a metal-roof coupé-cabriolet.

The Punto comes at a crucial time for Fiat, with the main Fiat group in profit but Fiat Auto still in the red. Last year's loss of €800m (£540m) will be down to €300m this year, and if the Punto succeeds the balance sheet should at last be in the black. Will it succeed? It deserves to; it's not as lovable as the Panda, but it's a good supersize supermini with a credible dose of Italian flair. I have a hunch that the forthcoming Sporting may be the one to have.

The rivals

FORD FIESTA 1.4 TDCI STYLE, £10,395

With just 68bhp the Fiesta is not rapid, but overall it's well made, good fun to drive and even more frugal than the lively Fiat. An imminent face-lift from the Ford engineers is likely to improve its bleak interior.

PEUGEOT 206 1.4 HDI S, £9,490

Ageing but still popular, the Peugeot 206 offers a smooth ride but unfortunately also comes with an awkward driving position. Its engine is shared with the Fiesta, although both can be had with livelier 1.6-litre diesel units.

SUZUKI SWIFT 1.3 GLX DIESEL, £9,500

The good-looking, likeable Suzuki Swift works particularly well with Fiat's 75bhp MultiJet diesel engine, and the combination should be available in the UK in the not-too-distant future. All-in-all it's brilliant value.