In the last 10 years Fiat Group has seen how it has been displaced from upper segment into entry ones. The time of big and popular Alfa Romeos, Lancias, and even Fiat is gone. Europe is now dominated by big Germans, and those trying to catch some piece of the segment fail: the French, Lexus, Saab, and somehow Volvo, and Jaguar. First it was the Alfa Romeo 166, but soon came the flop of Lancia Thesis in the upper segments. Then Germans continued to gain share, and D-Segment was the next battlefield that Fiat and its brands lost. The Lancia Lybra came first, and it was followed by the Fiat Croma, and recently the beautiful Alfa Romeo 159. All of these cars died without a direct heir, as the new Thema comes more from a ‘lucky’ move than a real strategic plan. These two segments, ‘D’ and ‘E’, count for 13% of European PC market in 2012*, (with more or less 2 million units), and are, along the ‘F’ and sporty cars, the most profitable segments. Current crisis hasn’t had the bad impact as in lower segments, and this has allowed Audi, BMW, and Mercedes to resist the storm and gain more money and share.
The problem is that more powerful premium Germans means lower share and sales for mainstream brands. Fiat knows it. Its compact cars offer is also being affected by strong competition coming from regular brands, such as VW, and recently by premium cars. Fiat as a brand came from selling the popular Tipo in early 90’s, to fail continuously with the Bravo/Brava, Stilo, and Bravo. Lancia had the same story with the Delta, and now Alfa Romeo seems to not be capable to maintain the initial success of the Giulietta. The Alfa 147 was a successful car, but unfortunately Alfa waited too long for its substitute, and in that time many clients moved to German brands. So, when the Giulietta came on scene, many potential buyers were already driving an A3, or a BMW 1-Series. At the end, Fiat Group hasn’t any presence in ‘E’ and ‘D’ segments (the Thema sells around 2.000 units/year, while the Ghibli hasn’t arrived yet), and now is being displaced in the vital C-Segment.
The Fiat Bravo isn’t a bad car. In my opinion, is quite balanced in terms of features, design and comfort. It’s a pretty car with interesting engines, and not expensive at all. But since its introduction in early 2007, it hasn’t been able to sell more than 100.000 units/year. It wasn’t even able to lead C-Segment sales in Italy. The problem: lack of bodytypes, such as the SW and 3 door (the Stilo 3 door was some how popular), positioning, and communication campaigns. The Delta is another interesting product. It could be defined the most refined compact in Europe thanks to its semi premium interior, and big room for the passengers in the back. The car is equipped with powerful engines, but that luxury touch had a price, which was sometimes close to Germans’. As the Bravo, it lacked of SW bodytype, because Lancia guys enlarged the Bravo to create a sort of big compact/small SW. Unfortunately most of the buyers look for a real SW or a real hatchback, but nothing in the middle. The Delta did a good job in Italy during its first years, but it is a complete flop outside its homeland. Both models will die this year as their production in Cassino plant will be halted. As it happened with bigger sedans, these two models are not expected to have immediate replacements.
The Alfa Giulietta is the last competitive compact car of the group in Europe. It was launched in early 2010, and soon it became a success in many European markets. It has allowed the brand to resist current car industry crisis (as the 159 disappeared, and the MiTo isn’t popular at all), but it has proved not to be immune from Alfa Romeo’s main disease: their short maturity life cycle. It had a great start but this success didn’t last for too long, as competition got more difficult, and it doesn’t offer the SW version (Italians love SW), and not even a sporty coupe version. The main threat: Fiat is being brought to bay and is getting out of offer in Europe’s most important segment. The main challenge: to bring to life a new concept of compact car (just as Nissan did with the Qashqai) to allow Fiat brand to enlarge its range of products (not the Viaggio). Lancia should wait a bit for the arrival of the new Chrysler 100. And Alfa Romeo should boost Giulietta’s sales with the coming restyling. Positioning and good marketing are the keys for this success, as design isn’t the problem for Italian cars.
*Based on EU total sales plus Russia and Eastern Europe