The incredible good situation of premium brands in current European mess could be a good business example of how to deal with crisis. Audi, BMW and Mercedes haven’t just resist the bad times but they’ve been able to gain market share thanks to their excellent product strategy. They rule in the upper segments and they became a problem for mainstream brands in B and C segments, thanks to their latest launches and their aspirational image. Most of car buyers dream of having a German premium car, no matter how it looks or what they get for the price they pay. The 3 Germans have achieved all of this, after years investing in technology, quality and strong marketing. That’s how an Audi A1 can make use of its brand image to offer the same of a Polo but with higher prices. The same happens in C-Segment, with the BMW 1-Series, Audi A3 and the Mercedes A-Class; and C-SUV segment: Audi Q3, BMW X1 and the recent Mercedes GLA. Germans have even invaded the MPV segment with the B-Class, and the new i3. The question isn’t if they will enlarge their range up to all segments, but when is that going to happen.
The couple from Alfa Romeo, Giulietta/MiTo, has felt the presence of the premium Germans. The new A-Class has become a headache for the Giulietta in its home market, while the Mini Cooper and A1 beat the MiTo since their launch. The battle between the 3 premiums and Fiat, Lancia and Alfa hasn’t gone further only because the Punto is somehow safe, and the Bravo, Delta (C-segment) and Thema (E-segment) are more niche products. The real threat comes for the popular Fiat 500. Thanks to its success (even if it is more than 6 years old), Fiat has been able to create a brand within the brand with 3 main features: style, personality, and premiumness (higher price). This formula has proved that Fiat can succeed asking for more money than its rivals, and it is an attractive reason for the German premiums to try in A-Segment. A BMW 0-Series or a Mini Cityman? an Audi A0? this scenario is perfectly possible and Fiat should consider it when projecting the next Fiat 500 generation. The Panda wouldn’t suffer as much as the 500 with the arrival of premium city-cars, as it is more a product for the masses.
The same could happen in B-SUV, where Fiat will be present from next year with the Fiat 500X and the Jeep B-SUV (possibly called Jeepster). Audi has just announced that it is working on a smaller SUV than the Q3 (C-SUV). A stylish 500X could see the light in a tougher world, with the competition coming from the mainstream brands (Peugeot 2008, Renault Captur) and premium (Audi Q1, BMW X0?). Fiat will have an enormous challenge in the coming years, as it must prove that its strongest products can resist the premium invasion.