The ‘future’ of Lancia according to Marchionne

lancia_logo_wallpaperIt was Sergio Marchionne who announced the future plans for all of the brands in late January. Fiat brand will be concentrated in two families, Alfa Romeo will become the entry premium brand of the group, Maserati will continue to grow in the top premium segment; Jeep will become more global, while Chrysler and Dodge will enlarge their range of products always focused on North American markets. But he said something else: Lancia, the mythical Italian car brand, will focus on the Ypsilon family and will be only available in Italy. This means that the brand will slowly disappear from European markets and there won’t be new models anymore. In other words, Lancia would die by the year 2017 when the current Ypsilon would be 6 years old and it wouldn’t be profitable to launch a new generation for only one market. But why Marchionne decided this? what’s the problem about Lancia?

Photo by coches.com

Photo by coches.com

2 years ago Fiat decided to give Lancia a second opportunity. They made use of some Chrysler models to expand Lancia’s range, after the disaster of the Lybra (D-Segment), Thesis (E-Segment), and Phedra (D-MPV). By that time, Geneva 2012, Fiat described the rebadge operation as the ‘new Lancia’. Besides the new Ypsilon and the beautiful Delta, Lancia counted on the new Thema, Voyager and Flavia to offer more products to more clients. But the presentation of these cars was as irrelevant as their sales figures. Despite the fact that they were not expensive at all (considering their engines and equipment), they were too American for European taste. Nevertheless, Lancia wasn’t expecting a lot from them (around 10.000 units by year in the whole continent), as the American Lancias were supposed to be a temporary solution for the small range, while the all-new products arrived.

The new Chrysler 200 is a fantastic car, but it wouldn't work as a Lancia in Europe. Problem: brand awareness outside Italy.

The new Chrysler 200 is a fantastic car, but it wouldn’t work as a Lancia in Europe. Problem: brand awareness outside Italy.

But Lancia didn’t have any chance. By the time the Chrysler rebadged models were launched, I wrote a post about the fact that the brand wasn’t dead. The merge with Chrysler would guarantee more  common models to be developed by Chrysler and Lancia for both sides of the Atlantic ocean. The thing is that the problem wasn’t the low sales figures of the Chrysler models but something else. Lancia has been struggling for years to succeed with its cars. The Lybra didn’t work. The fantastic Thesis was a complete disaster. The Phedra was too expensive compared to its twins from PSA and Fiat. The only model to keep Lancia alive was and is still the Ypsilon. Then Lancia had some success with the Musa. In 2009 the brand introduced the beautiful Delta, based on the concept released in 2006. In my opinion, this car is the best example of Marchionne’s decision.

Current Delta is perhaps one of the most complete hatchbacks in its segment. Besides being one of the most beautiful ones

Current Delta is perhaps one of the most complete hatchbacks in its segment. Besides being one of the most beautiful ones

The Delta is a wonderful, original and roomy hatchback with very good engine options at reasonable prices. I had the opportunity to travel in one and I must say that I was positively surprised by its interior, its details, and its comfort. It is a very complete car that had everything to compete with the BMW 1-Series and Audi A3 in the premium C-segment. But its sales figures proved that offering an excellent car wasn’t enough. In 2009, during its first full year of sales, Lancia sold around 30.000 units, and since then the demand hasn’t stopped falling. Not even Italians like it as it is quite down in the ranking and far away from its rivals. Some people could explain this result by the fact that it isn’t a cheap car. However, Lancia worked hard to offer an excellent C-Segment hatchback and few people got it. Therefore I agree with Marchionne’s plans: yes, the Thema and Voyager are not Lancias and consumers don’t even consider them, but the Delta is an excellent car that doesn’t deserve its poor sales results. So the best thing Fiat can do is to concentrate its efforts in Fiat brand and Alfa Romeo, while give Lancia a second place just as the market has done during the last years.

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39 responses to “The ‘future’ of Lancia according to Marchionne

  1. Lancia should be the brand that FCA use to challenge mercedes while alfa to chsllenge BWW!

    • That’s right. But first FCA needs to bring Alfa to life. If they can barely have 2 or 3 new models by year, it’s better if they concentrate their efforts in Alfa. Lancia could wait some years, at the end, FCA wouldn’t lose too much by getting rid of it and then bring it back to life in a decade.

    • Get back the Chrysler brand to Europe! We don`t want rebadged copies of american cars. When we buy american cars we want american brand! Regards from Norway

    • People also overestimate VW. They also struggle already for years with the Seat brand, but have enough cash to keep going and failing.

      I think that Lancia failed because of a lack of understanding of Fiat of what customers want in a car. Everyone wants to feel young, so focussing a car on more grown up people does not seem to work. And they kept hitting their foot against the same stone over and over again. Also designing cars for girls does not work. The first Ypsilon was more masculine and sold much more. I think like someone said already in this blog, they should have played on the competition between Alfa and Lancia. For instance Alfa = touring cars = rwd, Lancia = rally cars = 4×4.

      The plan they have now for Alfa is not bad, it is just 15 years late. And the market has moved on. Unless they are competitive for fuelconsumption they will fail, since they go straight into company car territory with the new vehicles, where everyone is downsizing except Alfa.

      Although if they play it well they could use their old-fashioned-ness to get some sales. I.e. BMW moved away from naturally aspirated 6 cilinders. Maybe Alfa could steel BMW customers who do not like Turbo 4 cilinders, especially outside Europe.

      They also killed their sales network by having only the Giullietta and the Mito, so biggest challenge is not product but actually distribution and service. And if they fail on this part they will sell a few cars when they launch and then sales will drop again like a brick. They need to have a more consistent design strategy and image so people keep buying it year after year. Not sure how to achieve this.

      • Ciao Philip. Yes, Alfa plans aren’t bad at all. A bit late, yes. But I’m sure the brand will find its place in the market. The 4C is a good start but isn’t enough.

    • Other thing to consider. Why not give Lancia to Pininfarina or Bertone, and let them design and produce cars taking some parts out of the fiat partsbin and add their own innovations, making their own cars. And then sell them through the Fiat network. Make a business model starting from scratch, with higher price and low break even points. With current design programs and quality control systems really any idiot can build a good car in small numbers.

      • When you have limited resources and many brands, you must decide where to concentrate your efforts. Lancia is only known in Italy. It makes no sense to keep investing on it when outside Italy no one is going to consider it.

  2. Marchionne’s policy toward Lancia was and still is as stupid as only can be.

    Maybe Lancia models are not very expensive but still they are not cheap. Fiat wanted Lancia to be near-premium, now they close the shop. Why not to sell Lancia at popular range ? Delta and Ypsilon should be available at lower basic prices. It’s better than dead ‘luxury’ brand.

    Why no new Musa generation, one of most successful Lancia models recent years. Based on Fiat 500L architecture but different design.

    Fiat 500X + Jeep B + Lancia NN = 3 cars sharing same architecture, Possible ?

    The whole marketing of Chrysler/Lancia products 2012-2013 was as poor as you can only imagine. Of course nobody in Europe could treat Thema seriously.

    Still Lancia Voyager makes sense in European market. Of course not present model but next generation.

    Separate dealership makes no economic sense ? So what, we can sell Lancia via Fiat dealership.

    It’s only the matter of strategic decision to axe Lancia and make more room for Alfa. Will not be surprised if next generation of Ypsilon will be Alfa plated.
    Marchionne did not give Lancia any chance, he only buried brand with too high prices, American Chrysler models and lack of Musa.
    Now we can see the last sign of agony. Ypsilon will be sold in Italy only. Why not in Europe via Fiat dealership ? Because Marchionne don;t wan’t to see higher Lancia volume, he want to bury brand.

    Greetings fm Poand where Ypsilon is produced and will not bi available. Really funny.

    Antek, Lancia Delta driver.

    PS. Fiat should sell Lancia brand to Chinese or Indians. Volvo and Jaguar doing quite well.

  3. Fiat has seemed to take no serious effort in marketing lancia for years, given the heritage and strong following it is very difficult to understand why they choose to throw it all away. As regards delta as an owner of a chrysler (lancia) delta it was and is a good car but as a premium product it is too heavily compromised by the fiat bravo roots with the hard plastics at lower levels in the interior and on most versions cheap looking silver finished dash and centre console trim. Suspension ok but not as supple or responsive as you would expect of a lancia. More positive points very roomy, nice engines fantastic love or hate it avant garde styling sadly people are not brave enough to buy them.

  4. You Imagine the japanese make up fantasy brands like lexus acura & infinit, what ever those horrible brands are supposed to be. And Marchionne would axe Lancia? One of the most storied brands in history. VW took a dead brand (Audi) back in the 1970’s and brought back to life, Fiat can do the same with Lancia, actually they should be more successful, and maybe not take 40 years to acheive success

  5. Yes, but Marchionne isn’t Piech and they need a lot of money only for the restart of Alfa Romeo.
    Better selling the brand to an asian producer gaining some money.

    • The problem with Lancia, as with Alfa Romeo, is that it’s too Italian and thus dependent on an Italian owner to thrive. Let’s face it, neither brand makes sense outside of Italian ownership, which in this day and age essentially means Fiat’s ownership.

      Faced with the choice of either selling Lancia (or Alfa Romeo) to a foreign automaker, or phasing it out, I’d choose the latter any time. Let’s not delude ourselves into thinking a foreign takeover is a good idea, it’s definitely not.

  6. Thank you Felippe for the article.

    I think the problem was and still is, 1. lack of money to restart TWO Brands (Alfa AND Lancia) and
    2. that their is not a really good idea how to position the Lancia Brand.

    Yes they wanted to compete against Mercedes and Alfa should have take on BMW.
    But their was always the problem that Lancias heritage is recognized by the most people about its sports success bu the cars are ment to be comfortable and not sporty.

    So their is a lack of strategic marketing vision for the brand.

    its a pitty because their is a lot of potential ..if they believe in it.

    “Alfa is the perfect car for Boys. Lancias for Gentlemen”

    saluti dalla Germania

    Pietro

  7. I’m Italian and I can assure you that the issue of the New Delta is a truck that is disproportionate, the old Delta was proportionate, there was a more sporty 3-door version that raised the image, ultimately the latest Lancia (lybra, Thesis, Delta) was simply afraid to do bad, (scribbles) not up to the Italian design. (Flavio Manzoni had prepared excellent concept for the Spear but have not entered into production). To revive the brand beautiful and elegant machines would serve no hearses

  8. Felipe, I will never understand just this: why Fiat has separated the image of Lancia and Alfa. They were competing each other for decades with massive success but they changed that because they were not good enough to handle those brands.
    After 1986, Dedra was the first sign that Fiat cannot be a group owner, they could not find a rhythm, there were no imagination, so they failed several times with a lot of products. And now they bury their best brand name, the Punto, leaving for Netherlands and losing the italian style that make automobility a passion. It’s sad and Marchionne will be remembered as a fatal man for the country. (and I’m Greek not Italian)

  9. Hello Juan Felipe,congratulations for your site!

    I really like your opinion about the Italian auto industry.All these months while I was watching all these really important facts about fiat group and lancia,i was really happy about the fact that fiat bought Chrysler and on the other side,i was really disappointed about the “death” of lancia.

    I think Lancia doesn’t deserve something like this,but on the other side with these bad decisions Marchionne made about Lancia all these years,i think they had it coming.Marchionne has been announcing new plans so many years about Alfa Romeo and alfa romeo has only 3 models.He didn’t say anything at all about Lancia except about turning this historic brand into a rebadged Chrysler so it was kind of natural that Lancia will end this way.

    I think that the whole idea of promoting Lancia as a luxury brand wa tottaly wrong.It would be much better if Lancia sold 4-5 light,sporty cars,with sharp handling and the much loved Italian design just like the example of Lotus.That way, everybody would respect Marchionne.If he did this,then it would still be place for alfa as a competitor of the classic german brands(Mercedes,bmw,audi) and lexus,infiniti and with a strong Maserati with 5-6 brilliant models I think the group would be a real headache to Germans!

  10. Considering that the MiTo should not have heirs, it should not be a scandal to see Lancia produce a sporty B-segment does not call Ypsilon, Angelo Granata-Delta could be an heir of the MiTo in the of standard FCA!

  11. It could be called the strategy “I have to kill to force the brand to make it reborn,” then closes Lancia for 5-10 years (I hope not), between 5-10 years creating some sports on a limited series as a new Stratos or a new 037 as did the Alfa Romeo with the 8C basically with the derivation of Maserati then slowly, slowly, year after year creating more generalist car.

    Basically Lancia must be closed temporarily and then re-open it to reinvent from scratch, there are historical models, but without the enthusiasm derived from the closing and reopening of the brand would serve little.

  12. close and reopen. i like the idea.
    and Felipe ( sorry for the wrong spelling of your name in the first post)

    Reading all your comment i’m now more sure than ever that the most people would like to see a sportier Lancia Brand that than what is or was offered till now.
    so it still remains the problem how to have TWO sportier Brands competing in the same price level.

    What do you say?

  13. Pingback: Anonymous·

  14. Why Lancia Ypsilon is shown in Geneva ? For Italian market only ?
    Ypsilon register huge sales increase in Italy, France and Spain.
    Starting belive Ypsilon will be sold in more countries than Italy only

  15. The ‘future’ of Lancia? No future unfortunately at least not withing FCA! Only chance is sell the brand to some chinese or korean carsmaker and hope they can do better!

  16. Felipe, you wrote about the sales disaster of the Lybra, Thesis, beautiful Delta. From the standpoint of a car designer – of course these models could be describes as beautiful.
    In my opinion the designer group (around Roberto Giolito?) took the completely wrong approach. The group decided to take resemblance to the fifties of the last century instead of the sixties. And worse the designer group didn’t learn anything from the sales disaster of the Lybra.

    I was interested in the new Lancia Delta. But I lost my interest when I noticed how big the new Delta is. I grow up in a time when the first Delta was in the show rooms. I expected a descendant of the first Delta.

  17. Mr Marchionne, give me back my money !!! I paid 11300 euro for Fiat Linea !!! My Linea – 3 steering boxes damaged in 75000 km !!! and many other pieces changed. Fiat told me – ,,is not our problem,, !!!!!!!!!

  18. Hi Jaun felip according to last Marchionne interviews in Geneva 2014 , Lancia will bring more chrysler models to europe and finally its working in an sporty Ypsilon HF.
    What do you think about this ???

    • The Chrysler models that will be brought to Europe are likely to wear the Chrysler badge IMO.

  19. Thanks for the article!I think like this people that the Ypsilon can make good result and to the other markets in Europe too!The Delta is a good model and Fiat can make new models for LAncia on the base of Fiat 500L,Fiat 500X!Why not!To make a new Lancia on base on the Punto!

  20. Unification between Lancia and Chrysler is just insane, I do assess!!
    So the death of Lancia brand is something of “Karmic reintribution”, owing to their irresponsible model policy for years. Delta is indeed an excellent hatchback of C-segment, yet has almost no effective trump cards in engineering, to survive this fierce segment in my notion.

  21. The idea of subcontracting Pininfarina or Bertone is to so bad. A new, somewhat limited production 037/Montecarlo, could benefit both the Alfa product and the Lancia brand bringing a higher total sales numbers for the fiat group. A b20, stolen by Bentley, now in a smaller Italian coupe could prove to simply become a market hit. However today, to have a winner one has to have better balls than moving badges around. Too much siesta, too little work.

  22. The Delta wasn’t a car at the same level of an Audi A3 or a BMW 1 Series at its launch. It fails in all dynamic sides: It have bad steering feel, it bounces and rolls too much, and it doesn’t have a handling at the level of the BMW.

    If you wanna talk about interior quality and finish, if fails as well: Bad material selection, OEM HVAC, poor quality switches, no “italian design” at all in its habitacle.

    Then, Fiat, as always, made the same mistake as always: Launch a car and forget it. You should keep your marketing and communication effort after the launch, so your car keep in the mouth of the consumers. Fiat made the same with the Bravo, and did the same mistake.

    • Of course it is not at the same level of the Germans. But it was positioned as a premium-wanna-be car. Less expensive than the German premiums and more expensive than the mainstream. Therefore you can’t expect to find the same quality and dynamic results. However, in terms of design (subjective issue), the Delta is different, fancy and has its own personality. The interior isn’t that bad as you say. I personally tried some and disagree with your opinion. It’s very comfortable and the upper versions are extremely well equiped. Yes, the group must work better on marketing and communication so their cars keep in the mouth of the consumers.

      • I think that the whole mistake is that possition of the brand as semi-premium, like Alfa. You can fight BMW or be a generalist brand, but be in nowhere in the middle doesn’t work in Europe. I really hope that Alfa Romeo and Marchionne had learned the lesson, and the new Giulietta will be a real 1 Series fighter, without compromises.

        (My own Lancia Delta roadtest for Autoblog, some months ago ;) : http://es.autoblog.com/2013/06/28/contacto-lancia-delta-s-momo-design-190-cv/ )

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