FOR three years, Fiat Auto, beset by the woes of the present, a plunging market share, and crumbling profits, has been living for tomorrow. The Italian car-maker has been forced to break with auto industry traditions of secrecy to trumpet its product plans long before their launch dates. From 1992 to 1999, Fiat Auto, the car and light commercial vehicles subsidiary of Italy's leading industrial group, is planning to spend 40,000 billion lire (about HK$192.5 billion) mainly on capital investment and research and development. Between 1992 and 1996, it is promising to launch 18 models. It has been darkest just before the dawn. Last year, Fiat's automotive branch plunged into an operating loss of L544 billion after a three-year slide from an operating profit of L2,362 billion in 1989. Its share of the Italian market, once an impregnable domestic fortress, tumbled in only four years from 60 per cent to an historic low last year of 44 per cent. In 1988 and 1989, it was challenging the Volkswagen group for leadership in western Europe, as each car-maker's share hovered around 15 per cent of the new car market. But burdened by a humdrum product range and under attack at home from foreign rivals, Fiat's fortunes have waned. By last year, its share of the west European new car market had shrunk to 11.9 per cent, while Volkswagen's had surged to 17.5 per cent. The Fiat group, which includes Alfa Romeo, Lancia, Ferrari, Innocenti and Maserati, fell to fourth place last year. It was overtaken by both General Motors (Opel/Vauxhall) of the United States and PSA Peugeot/Citroen of France. It lost further ground in the first half of this year. A sharp drop in demand forced almost all of Europe's leading car-makers to drop production this year. In the first six months of this year, new car sales fell by 17 per cent. But such was Fiat's health that it had been forced, in late 1991, to start cutting its production. It cut 259,000 vehicles from 1991 output, 230,000 last year and 173,000 in the first six months of this year. Fiat insists, however, the steep decline in west European car sales and the resulting fierce financial squeeze had not yet forced it to cut its capital and research and development spending as its arch-rival, Volkswagen had. Now, finally, Fiat is poised to counter-attack. At the end of this month, it will unveil in Turin its Punto small car range. The car will, eventually, replace the Uno and will become Fiat's most important range. The Punto alone should account for more than 40 per cent of the group's European sales. However, the Punto's development represents much more than just a new car for Fiat to take on rivals such as the Ford Fiesta, the Opel Corsa, the Renault Clio and the Nissan Micra. Fiat is also transforming the way that it builds cars. It has built in south Italy the most modern car plant in Europe. The factory, at Melfi, will begin a trial output of the Punto this month and volume production in January. The plant is Fiat's showcase for its new theology - the ''integrated factory'' - which it has been testing selectively at its plants for 18 months. Melfi has all the advantages of a green-field site: a clean drawing board, and a new workforce free of the legacy of old industrial practices. The average age of the Melfi workforce is 26, compared with 46 at other Fiat plants. Melfi is supposed to move car-making into a new era, beyond the much-vaunted lean production of the Japanese car-makers. It has no office building. All technical staff are being moved into the plant beside the stamping, welding, paint and final assembly lines. Work teams are being enlarged to include their own engineering and maintenance specialists in a new form of factory organisation. Melfi also represents a sharp move away from its extreme automation experiment at its Cassino plant in the mid-1980s. Fiat used Cassino to show militant unions that robots could replace workers at the assembly line. Although the robots performed well at Cassino, they never achieved the productivity hoped for. At Melfi, the accent has changed. ''Cassino was focused on 'hard' issues; Melfi is about 'soft' issues,'' said Paolo Cantarella, Fiat Auto chief executive. ''The integration of man and machine is different at Melfi. It is about how to organise activities, to involve people, to train them and keep them motivated to the job, rather than how to put the wheel on the car. We know how to do that.'' The Punto also marks a watershed for Fiat in development and engineering. Fiat claims it took only 36 months to develop the Punto at Melfi - 12 months shorter than its previous development programmes. ''This was the first time we have developed a car in this way, and it was important to eliminate operational problems from the start,'' Mr Cantarella said. ''This car is most important for our balance sheet.'' Car-makers usually keep new developments under wraps until they are launched, but Mr Cantarella is eager to show how the future will take shape. He revealed the large new Alfa Romeo saloon to replace the 164, probably in 1996, and a new Alfa Romeo coupe and convertible, ready for the end of next year. At the Fiat safety centre in Turin, where crash tests are performed on more than 300 cars a year, he readily points out the wrecked prototypes of a new Fiat Tipo for 1995 and the replacement Alfa Romeo 33 for 1994. The dearth of new product is finally ending, but it will take a further two years before Fiat can start reaping the full benefits of increased production. For Fiat, the moment of truth is near.