FIAT'S recent financial problems have been well documented, so the news that the Panda has won the European Car of the Year 2004 title must give the company a welcome lift.

But the latest version of the Punto is something I'm having trouble appreciating. The previous version was a step forward for the supermini sector and the 1.9 JTD in particular, with 80bhp, was probably the best all-rounder in the range, combining strong performance with excellent fuel economy.

The Punto was revised in the summer, and while the 1.9 JTD lives on, there is a new and more economical diesel in the form of the 1.3 Multijet.

I'm not a fan of the latest Punto's appearance – the distinctive nose of the previous incarnation has been lost in a generic Euro-supermini front end. But its 1.3-litre Multijet common rail diesel pumps out 70bhp from its meagre 1,242cc and is surprisingly feisty, up to a point.

However, Fiat's policy of offering a six-speed transmission with its 16-valve 1.2-litre petrol engine is not continued to the diesel. With nearly 3,000rpm on the rev counter at 70mph, the Punto would really benefit from a six-speed transmission and the benefits would be two-fold.

It would reduce the noise levels on the motorway and would improve on the already impressive fuel consumption.

This engine is already Euro IV-compliant and company car drivers choosing it would not be subject to the 3% benefit-in-kind tax supplement imposed on diesels. However, the petrol Punto offers low tax liability and the 16-valve version costs less than the Multijet.

So our Punto is a mixed bag of promising features that with a bit of effort, and maybe more cash than was available, could have challenged the best in the class.

Company car tax bill 2003/04 (22% tax-payer): £28 per month