TURIN - Americans may turn up their noses at a car as small as the Fiat Punto. But for Europeans who drive down the narrowest of streets and park in the tiniest of spots, the Punto and the other vehicles in its segment are a must.

That the car is technologically advanced and competitively priced is even better.

Fiat SpA says its Punto is all of these things, and the company draws on its track record to prove it. The automaker has sold more than 3 million Puntos since 1993, making it one of the best-selling cars in Europe.

"Fiat Auto always has been a key player in this segment," says Roberto Testore, chief executive of Fiat Auto.

This month Fiat is launching its all-new Punto. The name and the mission stay the same, but just about everything else has changed.

The Punto has 3,600 new components out of the original 4,500 parts. Unlike its predecessor, it is available in two versions, a 3-door and 5-door. Virtually identical in size, each has its own design characteristics: the 3-door is sporty, while the 5-door is more stylish, roomy and comfortable, says Giuseppe Perlo, Fiat product development director.

Feature lines in the front and sides are sharper on the 3-door, where the lines on the 5-door are rounded. Side strips widen toward the center on the 3-door. The 5-door has continuously-sized strips.

The biggest difference between the two cars is in the rear design. The 3-door appears to have a "pushed-in" concave hatch. The 5-door hatch appears "pulled out" (convex). It is "a car with a strong personality," Mr. Perlo says.

Fiat says you can fit five people comfortably in the cabin. Comparing the Punto to the U.S.-sold Chevrolet Metro or Volkswagen Golf , the Punto is taller, wider and longer than the Metro, and taller than the Golf.

Under the hood, the Punto's lineup includes three gasoline and two diesel engines. The base 1.2L 8-valve produces 60 hp; the 1.2L 16-valve sees 80 hp. The largest engine in the Punto range, a 1.8L 16-valve 130-hp powerplant, is used in the Punto HGT and also powers the upmarket Fiat Coupe and Fiat Barchetta roadster.

Fiat's diesel offerings include the 1.9L 60-hp with indirect injection. The 1.9L JTD common rail direct-injection turbodiesel achieves 80 hp, with fuel economy of 36 mpg (6.6L/100 km) in city driving.

The engines are coupled with a choice of three 5-speed manual gearboxes, a 6-speed manual or an automatic.

The Punto also is equipped with dual-drive electric power steering, with two operating modes powered by an electric motor instead of a hydraulic pump. When switched into city mode, the steering is lighter and requires less effort. This also gives Punto a 3% fuel savings during mixed city/rural routes.

"It's an innovative car," Mr. Testore says. "It's a benchmark for anyone looking for a compact car."

The new Punto will hit dealerships in Western Europe this month. Fiat hopes to sell 600,000 to 700,000 units per year, with 50% outside of Italy. The automaker in 1998 sold 529,718 of the previous model in Western Europe alone. It is the company's No. 1 seller.

Punto will be built at the company's Italian plants in Mirafiori (Turin), Termini Imerese and Melfi. Prices start at ItL 18 million (US$9,787). The car will not be sold in Asia, North or South America but will be seen in markets in Eastern Europe.

Fiat is considering launching several variations of the new Punto in the future. A cabriolet could be introduced in about two years.