The second generation Nuova (New) Punto, codenamed Project 188, was launched in late 1999. The styling was all-new while retaining the original Punto's distinctive shape and design, while the chassis and interior were completely overhauled. The new Punto also became the first Fiat in decades to carry the original round Fiat badge, to celebrate Fiat's centenary.The 1.1 and 1.4 turbo engines were discontinued due to emissions issues, and the entry-level models had only a 1.2 petrol unit (with either 8 or 16 valves, giving 60 and 80 hp (60 kW) respectively) or a 1.9 diesel (with or without common-rail injection)Two sporty versions were offered. The 1.2 16 valve Sporting model with a 6-speed manual, and the hot 1.8 HGT which could reach almost 130 mph (210 km/h). The 1.2 16V model also has a CVT-equipped variant (with a sequential manual shift mode consisting of 6 gears, 7 for the Sporting model). The 1.8 HGT accelerates 0-60 in 8.0 seconds. It was considered a big improvement in handling over the Mark 1 GT. The HGT was also available (in limited numbers) as an "HGT Abarth" which added deeper bumpers, rear spoiler, side skirts, new alloy wheels and interior trim. The HGT Abarth had no technical improvements over the regular HGT.The second generation Punto has also adopted Dualdrive electric power steering and comes with two operation modes, using an electric motor, rather than a hydraulic pump driven by the engine. This results in reduced fuel consumption and less environmental impact. It has a fuel economy of 5.6 L/100 km (50 mpg-imp; 42 mpg-US) - urban and 3.9 L/100 km (72 mpg-imp; 60 mpg-US) - extra urban for the 1.9 diesel. The 1.8 petrol does 8.8 L/100 km (32 mpg-imp; 27 mpg-US) - urban and 5.3 L/100 km (53 mpg-imp; 44 mpg-US) - extra urban.
In early 2003, Fiat celebrated the rollout of the 5,000,000th production Punto. In the same year, the second generation facelift brought further revisions to the platform, including extensive changes to the exterior styling and engines, partly due to changes in pedestrian safety regulations. The round Fiat badge, found only on the bonnet of second generation models, was introduced on the tailgate of the second generation facelift. On June 1, 2005, Fiat produced the 6,000,000th Punto at the Melfi plant. This Punto is currently the fourth-best selling supermini in Europe. Fiat Punto is now being produced in Italy and Serbia. Engine changes included a new 1.4 16v engine, alongside the staple 1.2 & 1.2 16v variants, and the introduction of two HGT versions, 1.9 L Multijet diesel , and 1.8 L 16v petrol engine which could reach almost 130 mph (210 km/h) continued over from the Mark 2. There was an introduction also of the 1.3 L common rail diesel MultiJet engine.Despite the launch of the slightly larger Grande Punto in 2005, the 1999 Punto is still in production, and was launched for the first time in Chile in 2007, as Punto Classic. It is to be replaced by a new B segment model. In October 2005, Serbian manufacturer Zastava reached an agreement with Fiat to make this version under licence with the model name Zastava 10. After acquiring Zastava in autumn 2008, Fiat continued production of this vehicle under the brandname Fiat Punto Classic in March, 2009. The fully new Grande Punto codenamed Project 199, was unveiled at the 2005 Frankfurt Motor Show and went on sale later on that year. Again styled by Giugiaro, the car is using the Fiat/GM SCCS platform. In 2009 the Grande Punto was re-named Punto Evo and given some minor styling tweaks including a new front and revised rear lights. It also received a new interior.