Demand depends on the offer, and the other way around. This rule perfectly applies to Volkswagen and Fiat brands, which find themselves in opposite sides in terms of sales and profitability. Volkswagen brand has more SUVs in its lineup than all of FCA Group brands together.
The gap is the result of consistent product planning and strong investment at Volkswagen Group, and lack of clear plans and indecision at FCA. Consequently, the German brand sells 13 different SUVs around the world, while Fiat, Alfa Romeo, Jeep, Maserati and Dodge together offer 11. If we include the rest of VW Group brands, their total would jump to 39 different models, or 3.5 times more than FCA.
The right strategy
Although many models could mean a potential cannibalization among them, Volkswagen has done the right things in order to avoid this situation. Not all models are available everywhere, and some markets get specific models designed according to local taste/needs. This is the case of the latest Volkswagen Taos/Tharu, a C-SUV derived from Seat Arona, which was conceived thinking of Chinese/American consumers.
Massive appetite for SUVs around the world justifies to have a big lineup of products that is due to grow with the arrival of Volkswagen ID.6 next year. Volkswagen is simply making use of a trend that is clear. FCA is not. Their latest new SUV was launched in late 2017, and only Jeep has more than 1 SUV in its lineup.
17 SUVs from Toyota
Volkswagen is only outpaced by Toyota in total number of SUVs available. Consumers can chose from 17 different SUVs branded Toyota that go from the little Toyota Raize up to the massive Toyota Sequoia. However, it still needs to do more in the lower segments, where most of the growth is happening now.
Still, SUVs are not the protagonists among Toyota’s products. Last year, they made up 29% of its global sales, which is lower than global average of 35%. In fact, SUVs counted for more of total sales at brands like Nissan, Hyundai, Honda. This shows that SUVs will gain even more traction in Toyota, as more small SUVs are launched.
Stellantis needs more SUVs
If we add the PSA SUVs to FCA’s count, then we have 23 different models offered by 9 brands. This is not even 3 SUVs per brand, which means that growth is extremely difficult, especially in markets like China, Europe and USA. In order to be competitive, a mainstream brand selling more than 1 million units, must have at least 5 different SUVs targeting the A, B, C and D segments.