Once a mass-market player in Europe, FCA CEO Sergio Marchionne says Fiat will never again be as such.
According to Automotive News Europe, Marchionne made the proclamation during this year’s Geneva Auto Show:
In terms of the scope of a mass producer of vehicles, Fiat (brand) no longer offers — and it never intends to have — a full range of product of the kind mass brands have. Fiat will lose its appeal as a general brand and it will focus on what it does best.
He adds that “the economics are not there” to keep Fiat in the mass-market arena as far as investments are concerned, and has no plans to claw back lost market share in Europe. As such, Marchionne has refocused the brand’s European lineup toward smaller cars like the 500 range, the Panda, and upcoming replacements for the Bravo and Punto.
Okay, Sergio, what does FIAT do best?
small, stylish cars, obviously. Marchionne seems to understand that keeping brand integrity intact leads to long term brand value, i.e. profits. People will pay more for a Fiat 500 than a Kia Rio, regardless of whether or not the Rio is objectively better. People likely won’t pay more for a Fiat family sedan vs. a Honda Accord.
My ’12 500 Abarth is a little jewel and I take car of her. I never felt that love for my Civic Si or my 350Z. Competent, boring cars in the end.
People don’t pay anything for Honda Accord because it is not offered for the sale as well as Camry. We are talking anything from FIAT vs anything from French brand. FIAT is not in the same league as VW, Opel or Ford.
FIAT become European Suzuki.
“Okay, Sergio, what does FIAT do best?”
Pronouncements. Plenty of pronouncements and five-year plans.
Sergio and FCA have pretty well managed to stick to those plans, too. Maybe not perfectly, but closely enough that it makes little difference.
Break down.
I thought HELLCAT was the obvious answer.
Niche markets, when given the right vehicle, can become as big as the mass markets. A rather famous entrepreneur once said, “People don’t know what they want until you show it to them.” That entrepreneur created what is now the world’s most valuable electronics company. Marccione has the right idea and its making itself felt in the way some of its brands are seeing huge growth in once very limited markets. I expect to see a lot more niche-type vehicles come from FCA that will blow open markets the mass-market consumer doesn’t believe even exists.
“These vulgar, large sale numbers. We don’t want them!”
So why don’t they just switch the badges between FIAT and Mazda. Problem solved! FIAT becomes niche, Mazda becomes large entity. Ev’eybody happay.
This might also solve FIAT and Dodge’s woes at the same time. Rebadged Mazda 3/CX-3/5/9 seem a helluva lot more appealing than the Dart / 500L / Journey, etc.
So, which 5 yr plan is this a part of? I can’t keep them straight anymore.
http://www.autoblog.com/2014/05/06/fiat-chrysler-automobiles-five-year-plan/
Mr Marchionne seems to be building a modern version of the old GM model brand model: start with a Fiat, move up to Alfa, then Maserati. The US also has a progression involving Dodge, Chrysler, then Jeep(?).
He’s fixed a few issues with the old GM model. First-off, his brands don’t overlap much and share a single sales channel. Second, the brands have distinct identities, unlike post-1970 Dodge/Plymouth or Buick/Oldsmobile/Pontiac.
It will be interesting to see if he can pull it off. Lord knows no one outside of Italy wants to buy a big Fiat sedan.
Do they want to buy a big Lancia sedan? Hehe. I was thinking some of what he’s using for Fiat and Lancia in other countries is really Chrysler anyway. I wonder if that will affect Chrysler product decisions in near future.
:Gratuitous lovely sedan photo:
https://automotiveviews.files.wordpress.com/2012/03/lancia_thema-8-32-1988-92_r61.jpg
Lancia is in suspended animation for now. They are down to a single model, and only sold in Italy.
I think it’s a realization that Fiat can’t compete in an all out bloodbath with the likes of VW in the volume small car segments. They could easily slit their own throats chasing volume with little profit in a stagnating market.
The way the article reads, the volume small cars segment is exactly where Fiat will focus. What they won’t do, it seems, is build a range of larger cars to compete with Passat and larger offerings from VW, PSA, etc.
Yes, thanks for the correction. I agree.
Fiat will focus on what does it best.. this is just funny, because FIAT always was mass market brand focusing on small cars, just look at ITA market years ago when their small cars dominated, now he is trying to tell they do best ,,niche,, 500…
Anyway i don´t think this is the right move, Sergio goes for money i get it, they will have just few models, earning thousand, maybe few thousand EUR per car, making proffits ,but Lancia is dead – almost dead, they are trying to bring Jeep to Europe, they might succeed who knows, they are trying to revive Alfa, who knows how it will turn out, i still believe FIAT should be producint at least 2 mass market models – small cars, hatchbacks, cars that are popular in Europe and there would be proffitable, why not FIAT has plants in Poland, Serbia and Turkey, they can produce cheaper cars there and ,,niche,, products in ITA plants like 500, Fiat min-SUV Alfa, Jeeps and Lancia – that 1 model or what it is:D, also EUR market is slowly rebounding i think the next few years EUR will be recovering so there is place for few cheaper models being build in poorer countries, while models with higher prices being produced in expensive ITA
I have to admire the chutzpah in your outright refusal to use periods.
Not really a surprise. This is how FIAT is already perceived in Europe, anyway.
My guess continues to be that there will eventually be another play to acquire PSA or Opel (although it would seem that the latter is no longer going to be on the table.)
Remember those articles from 7-8 years ago, when Marchionne was hailed for turning around Fiat without having had any prior automotive experience?
FCAPSA is a weird acronym, though.
What’s the value to another struggling European automaker in owning PSA? Besides, Dongfeng now owns 14% of PSA. I’d expect them to take a bigger stake before Fiat invests.
“What’s the value to another struggling European automaker in owning PSA?”
Ask Marchionne. He has already made a play for PSA.
(He wants scale.)
“Besides, Dongfeng now owns 14% of PSA.”
That may or may not be an issue. The thing about acquisitions is that they involve buying something that someone else owns.
I live in Germany and the Fiats are mainly Puntos, small engine crap mobiles. When you see them on the autobahn steer clear, inevitably they will cut you off in the left lane doing 80km/h.
Junk cars.
A FIAT 500 with the Hellcat engine and AWD would be a pretty hot seller here.
Or maybe just a 300 HP I4 Hellkitten engine and AWD.
I’m trying to envision fitting a Chrysler 6.3L V8 into a 500 engine bay longitudinally. I’m thinking the driver will have to move to the back seat, and the car will have a 76/24 weight distribution. Imagine the cornering!
Because JD Power!!!!
every time I remember what Sergio did to Lancia, I want to punch him in the face.
I guess you’re referring to re-badging Chryslers in Europe. If so, I agree that wasn’t a very nice thing to do. However, Lancia was having problems long before Sergio came along. Don’t lose hope though, once the Alfa Romeo project is done and deemed a success, we’ll see a revival of the Lancia brand. Guaranteed!!
bobman,
for sure, Lancia was having problems at least since the 1950s – the Fiat takeover in 1969 saved the brand and they kept making great cars – Montecarlo, Stratus, the first-gen Delta – in the 1970s and early 1980s.
when Fiat bought Alfa Romeo in 1986/87, however, they lost the plot about Lancia. the brands overlapped a lot, a process of selling rebadged Fiats with a few upmarket bells and whistles began and it’s been more than 20 years that Lancia doesn’t mean anything they once were known for.
while the Fiat brand got back on track with the 2005 Punto and the 2007 500, it seems clear to me that Sergio has a good plan for both the ends of FCA: he knows how to sell Fiats, Jeeps and Dodges on one end and Maseratis, Ferraris and halo American cars (Hellcats and Vipers) on the other end.
but there’s a missing link between these sides (Lancia, Alfa Romeo, Chrysler). I can’t see any good ideas for them, and the idea of confining Lancia into Italy, selling a badge-engineered Fiat Panda, is really sad.
Sergio will get alfa’s mojo back. Then the focus will be on Lancia. The brand will then achieve heights never before reached. Bet on it.
Is there a point to focusing on Lancia? I’m thinking it’s one of those too-far-gone instances. There isn’t anything that Lancia did, that Fiat or Alfa couldn’t do now instead.
Except maybe rally cars. But even that was a long time ago, and not especially relevant to sales today like it once was (80s).
Sergio had created quite an uproar in Italy when he introduced the re-badged Chryslers as Lancias. There is a following in Italy that would love to have the ‘real’ Lancias back. Could add some additional unique market competition for FCA against the higher end brands in Europe. Admittaly a niche market though.