THE MARKET

Fiat Auto has been successfully marketing an acclaimed MPV called the Ulysse for the last four years, but the popularity of the MPV as a means of family transportation has promoted a growth in demand that has transcended existing market boundaries. That's because MPVs are seen as providing more space, versatility and freedom of movement than traditional saloons and estate cars.

However, sales in Europe have now reached a plateau at around 400,000 units per year (around 3% of the total car market) which is far below the performance of MPVs in America where 1,000,000 units are sold annually (10% of the total US car market). Since the two markets are similar, the difference can be explained by the size, price and market positioning of the vehicles on sale.

In the US, MPVs are considered to be mid-range vehicles in both size and price - the European equivalent of a car in the 'C' or 'D' segment, costing around �14,000. Thus they appeal to a wide target audience. But European MPVs are in reality closer to Segment 'E' - certainly in terms of price. The Ulysse starts at over �17,000, the Ford Galaxy at nearly �18,000 and the Renault Espace at �19,000, so only the more affluent families can afford them.

In addition, the large size, heavy weight and conventional construction of most MPVs dictate that they must have comparatively large engines (2 litres+). Running costs are therefore higher than those of the typical mid-range saloon.

There is thus a gap in the marketplace - for smaller mid-market MPVs that deliver the advantages of larger versions but which are more affordable - both to purchase and to run.

Some while ago it was estimated that the potential for mid-market MPVs in Europe would mean an additional 300-400,000 units a year, doubling existing MPV volume.

The importance to Fiat of having a mid-market MPV is therefore clear. The challenge to its designers and engineers was to produce one that would properly satisfy the requirements of 'C' and 'D' segment customers in terms of price, size, spaciousness and running costs.

Customer profile and target audience
Despite being a relatively new type of vehicle, the mid-range MPV is destined to appeal to a wide target audience. In essence, its main customers will comprise families - probably with two or more children - who currently own a mid-range saloon, hatchback or estate.

They can be generally characterised as principle carers (mother or father) who:

• appreciate the space, practicality and versatility of the MPV compared with their existing vehicle
• are aware of the fun and extra dimensions that an MPV can bring to family activities
• but are not able to afford the traditional large MPV - its expensive purchase price and high running costs.

• drivers who want to stand out
• individuals who welcome a strong purchase justification
• lovers of inspired, innovative design
• appreciative of practicality and value for money

• they need to be able to seat the whole family (and friends, and luggage) in their car. [38% of mid-range MPV drivers cited space as their reason for purchase]
• they want a practical design that allows for easy access and adaptability for different loads. [19% cited interior access and versatility as their reason for purchase]
• they want car-like performance. [23% cited ease of driving as their reason for purchase]

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