By Jorn Madslien BBC News business reporter at the Frankfurt motor show

Fiat is talking confidently about the new Punto being a success

The unveiling of Fiat's new Punto, amidst much cheering and backslapping, is the strongest indication yet that the troubled Italian carmaker is leaving its problems behind.

"This is just the beginning of our new product range," Fiat Auto's brand manager Luca de Meo tells BBC News.

"We have made many sacrifices in order to have a lean organization... and to be able to respond to the needs of the market.

"From now on, we'll be a new Fiat. A Fiat of more emotion, capable of winning."

Fiat Auto plans to launch 20 new cars, starting with the new Punto and continuing until 2008.

Backing the plan is a 9.6bn euros (�6.5bn) investment package, a third of it in research and development.

In addition, chief executive Sergio Marchionne is pushing hard to improve efficiency at the iconic company's Italian plants.

And unlike many of his predecessors he has managed to earn the support of the unions for his vision - in part because he has promised that none of the factories will be shut.

"Fiat is on the right way," says Luca Cordero di Montezemolo, president of the industrial giant Fiat Group, which owns Fiat Auto.

Make or break

The new Punto will make up a quarter of Fiat Auto's production, so there is little wonder that Mr Marchionne, is desperate for sales of the car to reach 360,000 a year, nearly 40,000 more than the old Punto, its best-selling car.

Luca Cordero di Montezemolo believes Fiat is now heading in the right direction

If the new Punto performs as it should, Fiat Auto could bounce back into the black as early as next year.

If it does not, Mr Marchionne may be out of a job and Fiat's problems could worsen.

No surprise, therefore, when Mr di Montezemolo declares that "the grande Punto is an important car for Fiat"

New partnership

Fiat is also about to start producing cars outside Italy.

It will make a small sports utility vehicle, the Sedici, at a Suzuki factory in Hungary, and a revival version of its small 500 bubble car in Poland.

Last week it was revealed that Ford is to join the Polish venture with the view to make a replacement for its Ka.

Fiat subsidiary Lancia is going to be expanded

The factory there will produce 100,000 cars a year for each of the companies, though it is more than just a re-badging exercise.

"From an image point of view, Ford decided to join Fiat in this project," Mr de Meo says. "It shows how confident they are in our competence."

The cars will share a version of the Punto platform, but will have different bodies.

"We will have to come up with different designs," says Mr de Meo.

Lancia and Alfa follow suit

Other Fiat Auto subsidiaries are also being whipped into shape.

Lancia has plans to raise sales by expanding outside Italy. A 60% increase in sales should result from a combination of a string of new models and a push into Germany, France, Spain and Belgium.

"Lancia is doing very well," Mr di Montezemolo says, though it will be years before the division breaks even.

Alfa Romeo will also push ahead with several new product launches, and drivers can expect all the three marques to be designed along distinctly Italian, sporty and flamboyant lines.

Says Mr di Montezemolo: "We cannot forget that in our group we have Ferrari and Maserati."