Fiat has been forced to rethink plans to develop the largest MPV range of any European manufacturer.

In summer 2001 Fiat executives revealed a model strategy that added two smaller minivans to the current line up. The six-seater Multipla and Ulysse were to be joined by Punto and Stilo-based minivans.

But now the company says it will develop a three-car MPV range: a Punto-based model and replacements for the Multipla after 2005 and new Ulysse in about 2008.

Fiat has been disappointed by low demand for the Stilo, particularly in Italy where the overall new car market fell 18 per cent in March.

“Customers have not been prepared to pay that little bit extra for the Stilo because of its extremely high level of standard specification,” says a Fiat insider.

“We are introducing entry-level Stilos, and that seems to be working. It's true the car has not done as well as we had hoped. We are encouraged, however, by the reaction of the fleet sector to the car in the UK.”

Stilo is also finding it hard to compete against cut-price Golfs and Focus models in the ultra-competitive C-segment. In addition, a host of new model launches, including Peugeot 307, Toyota Corolla and Honda Civic have made things more difficult for Fiat.