Fiat has been a historic car brand in Europe and Brazil. It tried to expand its presence in other markets like the United States, India, Russia, and China, but failed. At the end most of its operations take place in Europe and South America, and more precisely Italy and Brazil. Two key markets for Fiat that are opposite in many ways.
Last year, these two countries represented 56% of Fiat total sales. The brand sold around 555,000 units in the rest of the world with zero presence in China and India. Consequenty, we’re talking of a car brand that is not global and is not trying to be. However, the presence of Fiat in these two regions, Europe and Latin America is quite different.
Fiat is globally known for making practical and cute small cars. At least, that’s the positioning the brand has worked on over the last 20 years. However, there are big differences between the perception of the public in Italy and Brazil, its two largest markets. Even the positioning of the brand is extremely different.
In Italy, where it sold 21% of all the vehicles last year, the brand faces challenging times. While the Panda and 500 continue to lead the market and are the benchmark in the A segment, the rest of the range can barely compete against the other mainstream brands. The brand left the B segment when it discontinued the Punto, even if this segment still makes up 21% of total registrations through August.
The Tipo counted for 11% of the C segment’s total, behind the Volkswagen Golf and the Audi A3. And in the B-SUV segment, where the 500X plays, Fiat was outsold by the Ford Puma and the Jeep Renegade during the first 8 months of this year. In total, Fiat’s market share within the Italian passenger car market was 14.3%. Five years ago, in 2017, its market share was 20.1%, and 30 years ago it was almost 32%.
The situation is quite different in Brazil, its largest market in 2021. Fiat sold 431,000 new vehicles in 2021, or almost 162,000 units more than what it sold in Italy. Fiat is not only the leader in Brazil, but it has been able to maintain its market share despite the lack of SUVs (the Pulse and Fastback were recently introduced) and the arrival of Jeep to this market. Fiat’s market share remained stable this year at 22%. Five years ago, it was 13%, and in 2012 it was 23%.
Thanks to the popularity of its pickups and the strong presence in the small segments, Fiat has been able to face the increasing competition from the Chinese brands and Hyundai. Additionally, instead of taking sales away, the arrival of Jeep to Brazil never affected the performance of the brand, in contrast to what happened in Italy.
Higher prices in Brazil
Fiat’s products in both sides of the Atlantic are totally different. In Europe, they are mainly the Fiat 500 extended family (500, 500C, 500e, 500X and 500L), the Panda and the Tipo. In South America the lineup includes the one city-car, one B-Hatch and B-Sedan, one B-SUV and C-SUV, and two pickups. Unlike Volkswagen that sells some of its products in both markets (Polo, Nivus/Taigo and T-Cross), none of the Fiats is available in the opposite side of the ocean (the 500e is available in Brazil, but its sales are not relevant).
But the most interesting part of the story is how the Brazilian division has been able to increase the average price of its products. This is the consequence of the success of the Fiat pickups, the most popular in Brazil. Thanks to the Strada and Toro, the average price of the Fiats available in Brazil is €23,388 during H1 2022 (R$126,613). This is €841 more than the average price of the passenger cars offered by Fiat in Italy.
Of course, the average in Brazil falls to €16,278 (R$88,122) when excluding the pickups. However, the Strada and Toro made up 39% of Fiat’s sales in Latin America in 2021, and 42% in Brazil.
Part of the explanation is due to the perception of the public. Fiat is considered the ideal car to buy among the Brazilian public due to its low maintenance cost and the strong service presence through out the country. Finally, it is still considered a cool brand following the continuous presentations of new models.
Fiat Brazil has launched five different models over the last 5 years. In fact, the average age of the Brazilian lineup (excluding the vans) is 3.4 years. In contrast, Fiat Italy offers six different models whose average age since the year of the introduction to the market is 8.7 years. The last time the Italian division of this brand introduced an all-new model was in 2020 when the Fiat 500e was presented. Before that, Fiat introduced the Tipo and 500X in 2015.
Innovation, consistency on the product launches, and connection with the consumers needs, makes of Fiat Brazil and example for the other divisions of the brand.