What’s the future for Fiat brand?

fiat-panda-e-fiat-500l.jpgEverybody is wondering about the future of Fiat brand after Marchionne’s statements during Geneva motor show. This is called the “big issue” among FCA’s top managers as is not clear what it is supposed to be done regarding the Italian brand. While there has been a lot of speculation about a possible acquisition by the Chinese, the priority, according to the CEO, is to improve the profitability of the company. But Fiat remains a big question mark.

Fiat 1Why? Because as I wrote in a previous article, the brand is not attractive and doesn’t have any growth potential anywhere except in Brazil. They waisted valuable time during the recovery years in Europe with very few launches, staying behind the mainstream competitors in terms of offer. Peugeot, Renault, Volkswagen and Ford made use of the increasing demand between 2014 and 2017 to improve their positions through the launch of new generations of their popular subcompacts and compacts, and the introduction of new SUVs.

fiat-punto-2014-multijet_55.jpg

It wasn’t the case of Fiat, which continued to depend on its city-cars, almost disappearing from the subcompact segment, and with a small presence in the SUV segment. The result is that Fiat Europe has now a very old range of products (an avarage of 8 years old), and a small market share outside Italy. The worst is not to have a successor for the Punto, but to have such a small presence in Europe’s driver of growth, the SUV segment. The 500X is Fiat’s only SUV, which was launched in 2015 and posted its sales peak in 2016. While one in three of the cars sold in Europe are SUVs, the 500X counted for 8,7% of Fiat’s EMEA sales in 2017.

Fiat 2Therefore it is not surprising to hear the latest statements from Sergio Marchionne. In Europe the brand is not what it used to be, and Brazil is the only remaining market where it has a potential. So what to do with it? It is hard to revert this trend because Fiat doesn’t have a good reputation in Europe. It is true that VW Group arrived late to the SUV party, but it has an excellent rate among the European buyers.

286_Gama_Tipo_882x375_2p66kz8k5gThe bad reputation of Fiat is partly explained by the lack of clarity regarding its positioning: it wants to be recognized as a mainstream brand just as Peugeot, Volkswagen or Renault, playing in the same price ranges; but at the same time its cars are quite aged with poor technologic features and low perceived quality. If Dacia, hitting from below, is added to this situation then Fiat is right in the middle: it is neither a real mainstream brand nor a low-cost one. The only exception to this is the Fiat Tipo, which actually sells well and not only in Italy.

fiat-3.jpgBased on this complicated situation, Fiat could focus its efforts on doing what it does the best: iconic cars.  If the Fiat 500 is still selling well despite its age, then cars like this is what the brand must continue doing in Europe. The market is already saturated of mainstream and premium cars, but there’s a limited offer of iconic cars. Fiat would become a “mainstream niche brand” known for its charming small hatchbacks and its original small SUVs. These cars would find fewer clients but it would be compensated by a higher price (higher margin), just as it happens now to the Fiat 500, a semi-premium city-car.

imgThis operation would exclude experiments like the Fiat 500L, which is closer to the Panda’s concept than the Fiat 500. The new positioning would bring back historic nameplates that worked well in the past and could be appealing to the current drivers. These models could be the perfect cars for eventual autonomous driving fleets, as interior details and comfort are set to become the points of differentiation of this new way of mobility. Last but not least, the immediate future of Fiat is extremely vulnerable and nothing is granted, especially now when Marchionne is about to leave the company within the next 24 months. Anything can happen.

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7 responses to “What’s the future for Fiat brand?

  1. This plan is the best chance. FIAT should look to MINI as a brand.
    500 & 500C
    600 (500ised version of Argo)
    600X (renamed 500X)
    124 coupe & spider (part of this niche market)
    Abarth would also become a more important brand in this group, just like John Cooper Works are for MINI.

  2. A question to you Felipe, do you believe in Fiat?
    Feel free to answer as Marchionne doesn`t…
    Would he believe in Skoda or Seat a few years ago? No.
    Would he believe in Audi long time ago? No.
    Fiat needs new products. Competitive ones. End of story.
    Where is a proper C SUV for europe??? Anyone.???…
    Any SUVs in LATAM????? No???…. It will eventually kill the brand in there too.
    A RWD Fiat 124 Abarth with the same engine and power of a humble Fiat 500L in US?????? What is that????
    Fiat is the next Lancia… just wait and see.
    Hope Altavilla arrives soon….

  3. Marchionne really needs to shut up and stand down, he did a jood job saving Fiat and Chrysler, but now Fiat (and Abarth), Lancia, Chrysler and Dodge are starving beacuse he insists that nobody wants to buy cars form them when numbers says otherwise. He trashed two good products like the Dodge Dart and Chrysler 200 without giving them a second chance and now he’s killing Fiat and Lancia with his statements. Fiat should continue with the rational/aspirational range of models: cheap reliable little cars for volume like Mobi, Panda, Argo, Cronos and Tipo, make the Uno a B-SUV, and maybe add a C-SUV, produce them in Serbia, Poland and Turkey for EMEA, in Brazil and Argentina for LATAM and in India for APAC, keep the 500 family as a sub semi-luxury brand entirley manufactured in Italy, and let Chrysler-Lancia, Alfa and Maserati deal with upper segments. Right now FCA has the platforms to have a full range of products in each brand. Chrysler-Lancia can share FWD-AWD platforms, Dodge-Alfa-Maserati can share RWD-AWD platforms, Jeep can have a mix of both and share body on frame structure with RAM and Fiat can use the current economy and FWD platform shared with Chrysler-Lancia.

  4. It´s better become Fiat brand to Lancia brand and use models classics from Fiat e Lancia with new plataform and new designs to actually days.

  5. Bravo Mauricio! I whole heartedly agree.
    The Tipo is the evidence that people will buy a Fiat car without it being a 500 or Panda!
    And if they invest in it further to offer the new Firefly engines and dual climate AC then sales will increase even further.

    If the Tipo can sell 125k units in Europe, how many would a new Punto/Uno sell??

    And for the love of God, release SUVs with a Fiat badge already!! How can you expect Fiat to be competitive and present better profit margins without SUVs????

  6. I still do not know why he / Fiat let the Punto die? The Punto was Fiat’s Fiesta, it’s C3, it’s Ibiza and yet it is still being allowed to die of old age, while all competitors have come out with new models.
    Look how popular the Citroen C3 is.
    Fiat group has wasted money on so many failed adventures, it surely had enough money to launch a new Punto before the name becomes forgotten or ridiculed. I am sad to see what Fiat has become, but only Fiat is to blame for this. As a Fiat fan, the 124 Spider is the only Fiat I would like to buy, but it is of course one I cannot afford, so I consider an Ibiza instead.

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