Fiat brand: the strategy for the coming years

Fiat is one of the European car brands to lose more market share during the last years. Many things have contributed to this situation that finally seems to hit bottom rock thanks to the arrival of the Fiat 500L. Fiat brand has seen how its European sales drop  due to the rise of Korean car makers in one hand, and the aggressive product/marketing campaign of VW. Fiat isn’t the brand of ‘value for money’ anymore, as many Europeans continue to buy more and more Hyundai and Kia, while VW increases its presence in the upper part of the segments. However, competition isn’t the only variable that has had a direct impact on Fiat’s share. The brand has run out of offer in important segments such as the ‘C’ and ‘D’ ones, and hasn’t proposed any real SUV yet. Then came European debt crisis, and soon the introduction of new models was delayed. The brand survives thanks to the 500, Panda, and lately to the 500L, because even the Punto (which was the best-selling car in Europe in 1997) shrinks in the rankings.

The Panda family should get enlarged with the arrival of a B-MPV. In my opinion, Fiat could have a big success with a 3 door B-SUV (something like a Suzuki Jimny), to complete the offer of small 4×4 started with the Panda 4×4.

Fiat knows it must do something and can’t fail. In the last 5 years the brand’s awareness in Europe has evolved due to the success of the 500 and Panda. Both models have allowed the brand to rule in European A-Segment, and even double VW’s sales. Europeans know Fiat because of its small and interesting cars, and that’s the base of what Fiat may do in the coming years. Both models make part of A-Segment, they share the same platform, but they are extremely different in their approach and concept. The Panda is focused on practicality, roominess, and easy features. The 500’s values are personality, style, and personalization. The right difference has allowed Fiat to dominate in the segment without cannibalization, as someone who buys a Panda would never buy a 500, and vice versa. It is also the base for what Fiat may do in the coming years: one brand, two worlds.

The success of the 500 is the reason for the expansion of the family. Next year the B-SUV will make its debut.

Fiat may be working on developing a parallel family to the 500 one, but based on the values of the Panda. The 500 family is now composed by the regular 500, the cabrio, the Abarth, the 500L, and soon by the larger 500L and the 500X. But the Panda’s values are quite important as well, and Fiat may want to expand them into larger segments. That’s how they might be working on a larger version of the Panda (something like the 500L but focused on the Panda’s attributes). A bigger Panda could be a good option for those looking for an easy car, with room for more luggage (and maybe people), with the features of a Panda. This is because some consumers may like the 500, but they don’t look for original cars, but just a comfortable and easy handling car. The 500L may be a good example: not all want a stylish MPV, and some may prefer the regular and easy Ford B-Max. The same could be applied in B and C segments, as the Bravo will say good-bye shortly, and the Punto slowly dies. As I proposed it some months ago, the next Punto should make use of this two worlds, offering the regular one (for the masses), and a fancy/sporty/stylish one for those looking for something more. Besides the regular 3 and 5 door bodytypes, the ‘easy’ world could include a SW-MPV version, while the stylish one should be the place for a sporty coupe, a cabrio and even a sporty Crossover. The same could happen in C-segment where the Bravo might have 2 different successors: a regular one, based on the Fiat Viaggio (to arrive in late 2013), and a Crossover to compete with the Qashqai. If Fiat manages to position all of its models in this way, it could enlarge the offer, increase the demand and become a competitive alternative in the difficult European market.

This is how I think Fiat should apply its 2 world strategy. The Punto family should get enlarged with the arrival of a family version and a sporty coupé. Then the C segment should be composed by the regular hatchback plus a SW version, while a sporty and stylish coupé (that could be a 5 door coupé). Then the MPV segment would count on the 500L and a the equivalent based on the Panda’s attributes, while the 500L long should be in the middle of the way between the B and C-MPV. An even larger Panda could be a great option to compete with the Scenic, C-Max, Touran. Then the new Freemont (to arrive in 2015) should include the attributes of both worlds. For SUV segment Fiat should develop a ‘Suzuki Jimny’ version of the Panda to complete the offer of small SUVs with the coming 500X. Then for C-SUV, there should be a derived Crossover version of the C-hatchback (something like a Qashqai).