Author Archives: Felipe

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2013: Best wishes to all and especially to Fiat Group

Fiat-Chrysler 2012-2013The new year is right here so it is time for the best wishes and a quick outlook at the main events of the ending year. So here there is my quick analysis and predictions for the coming year.

2012

  • 2012 was the year in which roles changed: Fiat went from being the rescuer of Chrysler to become the rescued. Though the Italians don’t have any problems of cash, I just wonder what would be its situation if it wasn’t of Chrysler. Current European crisis hits the weakest auto makers and certainly Fiat is one of them. Fiat does not control the totality of Chrysler yet, and therefore it can’t access to its cash, but its position in automotive world is much stronger thanks to Chrysler results in America.
  • Awesome performance of Chrysler in USA. It had the best sales’ growth among the 3 of Detroit. The interesting thing is that Chrysler made it without the help of any all-new model (except for the Dodge Dart). The result is mainly explained by the recovery of US car market and the great Marketing and Advertising campaign of the group.
  • Brazil was again Fiat’s main market with excellent results. 2012 is the best year ever with a record month in August with more than 100.000 units delivered. However Fiat’s pole position began to be affected by the arrival of new and powerful players.
  • As a global player, Fiat-Chrysler knows it must be present everywhere. 2012 was the year of the come back of the group to Chinese market. The JV with GAC allowed Fiat to start production of the Viaggio, based on the all-new Dodge Dart. The Dart is the first totally made car developed from zero by Chrysler and Fiat together. It is expected to hit both, American and Chinese market, and to arrive in Europe in 2013.
  • Too bad for Fiat-Chrysler in India and Russia, the other key markets to become an important global player. In India Fiat decided to sell directly its cars and announced the introduction of Jeep brand. In Russia poor results for Fiat brand as they are waiting for the start of the construction of a plant along with Jeep models.
  • As a part of Marchionne’s intentions of expanding the business, Mazda and Fiat agreed to start the production of their fist car together. Alfa Romeo will have its roadster back and Mazda will have a great successor for its great MX-5. And this may not be the last project together as both companies are interested on sharing costs for their future small cars. Fiat-Chrysler needs urgently a partner in Asia so it could become a real threat for Toyota and VW. The best candidates are Suzuki or Mazda.
  • During the year the group presented the new Fiat 500L, the new Fiat Siena, the Lancia Flavia, Maserati Quattroporte, Ferrari F12, the Fiat Viaggio. They showed also the new Dodge Dart and Viper. The models to say goodbye were the Polish Fiat Panda, the Fiat Idea and Lancia Musa, the Alfa 159, Brera and Spider and Ferrari 599. The Dodge Caliber did also say goodbye, and so the Jeep Cherokee/Liberty and Dodge Nitro.

2013

  • The new year will be a difficult one for Fiat-Chrysler. The whole group is expected to sell 4.2 million from 4 million in 2012. The growth will come from Chrysler division in USA, where rise will continue but slower. Fiat will face tough times as Europe will continue to suffer and competition will get hard in Brazil. Good previsions indicate that European car market will perform as bad as 2012. 
  • Great expectations for the Viaggio in China. If all forecasts are met, this car would be the first of more models to be built locally. Jeep will start production of its SUV there.
  • 2013 will be an important year for the future of Alfa Romeo. After many failures, the revival of the brand must work and will start in late 2013 with the introduction of the all-new 4C, which will be in charged of improving Alfa Romeo’s image in Europe and increase the brand’s awareness in America. In terms of sales, Alfa Romeo could face its worst year.
  • Along with Alfa, Jeep will be also another protagonist of the group. Local production is expected to start in late 2013 in Italy and China, while it will be officially launched in India (imported only). Jeep is considered the only truly global brand of the group (besides Ferrari).
  • In USA Fiat brand will increase its range of products with the introduction of the 500L made in Serbia. Fiat wants to replicate the success of the small 500, selling the minivan version everywhere. That’s why during 2013 lot of information should come from the small SUV they are building in Italy for both, Fiat and Jeep brands.
  • In 2013 it is expected the presentation (which does not mean introduction) of Fiat 500XL (the 7 seater version of the 500L), the Fiat Viaggio for Europe, the Alfa Romeo 4C, the Maserati Ghibli and the successor of Ferrari Enzo. In America we will see the new C-hatchback for Chrysler and the successor of the 200, the new Jeep Cherokee and maybe the new Jeep Compass/Patriot. They may anticipate the next Chrysler Town & Country/Dodge Caravan, and the future mid-sized Dodge (Barracuda?). Meanwhile the Fiat Bravo and Lancia Delta will say goodbye. The same will happen to the Italian Lancia Ypsilon, current generation Maserati Quattroporte, and maybe Jeep Compass/Patriot.
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European car market: the dramatic change

Premium vs MainstreamIt’s becoming frequent to hear bad news coming from Europe. Every month European car sales are released with terrible results that seem not to hit rock bottom. This year about 12.5 million cars will be sold, which is by far one of the worst results in the last 15 years. All of this mess is known by everybody and makes no sense to keep talking about it. Nevertheless when looking at car sales figures of 5 years ago, it is clear that not only the market has dropped dramatically but also its composition. The change can be seen in every road in Europe and if the trend is not stopped, several car makers will have even more problems in the future.

European Union + EFTA countries car sales for 2007. Notice the big importance Italy had in European market. Big numbers for Spain, Greece and Portugal. Among car makers notice the short distance there was between Opel, Ford, Renault, Peugeot and Fiat, and VW. Audi was occupied 11th place in the ranking. Hyundai and Kia got a combined market share of 3.5%. Fiat brand almost sold 1 million cars while Alfa and Lancia sold more than 265.000 units combined. Souce: ACEA

European Union + EFTA countries car sales for 2007. Notice the big importance Italy had in European market. Big numbers for Spain, Greece and Portugal. Among car makers notice the short distance there was between Opel, Ford, Renault, Peugeot and Fiat, and VW. Audi was occupied 11th place in the ranking. Hyundai and Kia got a combined market share of 3.5%. Fiat brand almost sold 1 million cars while Alfa and Lancia sold more than 265.000 units combined. Souce: ACEA

In 2007, just 5 years ago, almost 16 million cars were sold in the European Union plus EFTA countries (Iceland, Norway, Switzerland and Liechtenstein). By that time American financial crisis was about to start while Europe had fun with interesting macroeconomic indicators and a ‘healthy’ government management. Europe could say that it could support auto industry with incentives as most of all car makers operating over there had full efficiency and use of their plants. Contrary to what would happen later, by the end of 2007 Germany was one of the few car markets to fall in registrations, while Italy and France led the growth. In other words, European car market was a completely different story 5 years ago. In terms of composition (by brands), VW was of course number one with an important market share, followed by mainstream brands from France, Germany and Italy. The strong growth of almost all car makers was also triggered by good demand coming from Eastern Europe (EU new members). The new economies allowed western companies to invest and develop more business over there. But the subsequent events proved that economy is a continuous cycle and is strongly affected by public affairs.

This figure shows the dramatic change premium and mainstream brands have had. Audi is perhaps the brand to grow more fast than any other. Peugeot, Renault, Ford, Opel, Citroen and Fiat are dealing not only with VW brand competition but also with premium brands. The brands that lost more market share are Opel (-1.7), Toyota (-1.5) and Fiat (-1.4). In the other side, VW gained 2.7, Audi 1.6, and Nissan 1.5 (thanks to Qashqai sales). Source: ACEA

This figure shows the dramatic change premium and mainstream brands have had. Audi is perhaps the brand to grow more fast than any other. Peugeot, Renault, Ford, Opel, Citroen and Fiat are dealing not only with VW brand competition but also with premium brands. The brands that lost more market share are Opel (-1.7), Toyota (-1.5) and Fiat (-1.4). In the other side, VW gained 2.7, Audi 1.6, and Nissan 1.5 (thanks to Qashqai sales). Source: ACEA

When looking at 2012 results the first word that comes to mind is ‘dramatic’. The fact that by the end of this year about 3.2 million cars won’t be sold is a shocking reality that tells the bad situation that many European car makers face. No matter what the reasons are, Europeans don’t buy car as much as they did and the worse is that it will continue to be like that for the years to come. This may not be the typical crisis in which economy collapses for some years and then it strongly grows again. Besides the current problems with governments’ debt and unemployment among young people, Europe may be coming thru a new trend in which cars don’t occupy the same place anymore. The sharing car program or alternative transport means are good examples of the change. So, by the year 2016 when all analysts expect Europe to grow again, car market will be a completely different one, also because of its composition. If 5 years ago VW Group was the absolute leader, nowadays the big growth of this German player may be unstoppable for the coming years. Meanwhile the other Europeans struggle to survive and the market gets even smaller for them. The problem for PSA, Ford, Renault, Opel and Fiat is not only VW but premium brands. Audi, BMW and Mercedes became the new stars of the show due to their enormous growth and the fact that they enlarged their range of products. In the past they used to sell big sedans while mainstream brands were in charge of smaller segments. Times have changed and now Audi and BMW are strong in ‘C’ segment with their A3 and 1-Series, while Mercedes gets ready with its awesome A-Class. The same happened to Volvo and Lexus. And for smaller segments Audi introduced its successful A1. They all presented their small SUV and minivans, and soon Europeans will be able to buy the ‘C’ segments sedans such as next Audi A3 sedan, Mercedes CLA and BMW 2-Series.

In just 5 years the market collapsed and now 3.14 million fewer cars are sold. Fiat is one of the most affected as all of its major brands fell more than the market (only Ferrari and Maserati gained market share). Excellent performance of Hyundai-Kia (together they sold 6.000 units less than Fiat-Alfa-Lancia combined in YTD Nov 2012). The only VW brand to perform bad was Seat. If the trend continues Skoda may overcome Fiat brand in the next years. Source: ACEA

In just 5 years the market collapsed and now 3.14 million fewer cars are sold. Fiat is one of the most affected as all of its major brands fell more than the market (only Ferrari and Maserati gained market share). Excellent performance of Hyundai-Kia (together they sold 6.000 units less than Fiat-Alfa-Lancia combined in YTD Nov 2012). The only VW brand to perform bad was Seat. If the trend continues Skoda may overcome Fiat brand in the next years. Source: ACEA

Companies like Peugeot, Citroen, Opel, Renault, Ford and Fiat not only struggle to overcome current crisis but they also figure out how to stop the market share gained by the 3 German premiums. The battle is specially tough in ‘C’ segment, for passenger and SUV. The new premium compact cars gain market share as their traditional rivals don’t catch the attention of buyers as before. It seems that more and more consumers prefer the entry-level versions of an Audi A3 or BMW 1-Series than full level versions of a Focus, Megane or Astra. Of course Fiat is one the most affected brands with this change, as its portfolio gets smaller, its position in ‘C’ segment is now marginal and its premium brands run out of fresh products. Besides it has two big problems: as a brand and as a group, Fiat strongly depends on a single market and in terms of product, it depends a lot on smaller segments without any big presence in larger segments (sedans and SUV). It is why if market share is analyzed Fiat group brands lost an important piece of market share due to the rise of premium brands and Koreans. Europe may not be the same market it used to be and its perspectives may be not as good as wanted, but Fiat should accelerate its plans with Alfa Romeo. It has a great potential to catch some market share of the new rising premium small cars and SUV.

Market share for C-Segment cars in Europe for 2007 and 2012 July YTD. Big changes in the composition of C-Segment. The Golf increases its distance. Others include the success of Hyundai i30. Fiat Bravo's fall is bigger than the rise of Alfa Giulietta. Source: bestsellingcarsblog.net

Market share for C-Segment cars in Europe for 2007 and 2012 July YTD. Big changes in the composition of C-Segment. The Golf increases its distance. Others include the success of Hyundai i30. Fiat Bravo’s fall is bigger than the rise of Alfa Giulietta. Source: bestsellingcarsblog.net, carsitaly.net

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Fiat Palio, the most produced car in Argentina

The new Palio is produced also in Argentina since April 2012

The new Palio is produced also in Argentina since April 2012

Good news come from South America. In November 2012 the new Fiat Palio was Argentina’s most manufactured car. All car makers produced 78.000 units, 3.2% more than previous November, but 1.8% down compared to October 2012. YTD production is down 9.4% to 703.472 units, making of Argentina the third largest producer in Latin America and above other important markets such as Italy. In that month the new generation Palio was the most produced car over there with almost 6.000 units. Fiat produced more Palios than traditional leaders like the Ford Focus (5.115) and Chevrolet Agile (5.090). Most of this production is headed to Brazil, where the demand of this car is growing up so fast that is getting close to Fiat’s best-seller Uno (November YTD indicates that Palio demand is up  81%). In Argentina the new Palio is also very popular but as a big part of local production is sold out in Brazil, Fiat can’t supply the demand and people must wait for months to get their car. That’s why the demand for Argentinian market is so weak (up only 4.1%). The new Palio is being produced in Cordoba, Argentina, since April 2012. At the beginning they produced around 200 units per day but they want to increase it up to 500 units. The car is produced with 3 different engines: 1.4 Evo, 1.0 Flex and 1.4 Flex for Brazilian market. Initial target was to produce 60.000 units of both, Siena and Palio, by the end of the year. YTD November figures show that Fiat has produced 66.682 cars. They made it but 2012 numbers are far away from last year results. In 2011 Fiat produced 110.000 units, with the Siena counting for 78%. Among all car makers in Argentina, Fiat is the one with the deepest fall in production, down 39%. VW is down 12%, GM -6%, and Ford -13%.

Argentinian industry is down 9% due to less local demand and economic problems regarding exchange rate and inflation. Fiat's share is 9.5% compared to 9.8% of demand market share. Source: ADEFA

Argentinian industry is down 9% due to less local demand and economic problems regarding exchange rate and inflation. Fiat’s share is 9.5% compared to 9.8% of demand market share. Source: ADEFA

More news

Fiat Brazil has announced that double airbag, ABS and EBD are now standard for the entry version of the Uno. This is a response to two facts: from January 2014 all cars produced in Brazil must count on this features. And secondly, because the Uno is losing market share and its sales continue to drop. Fiat wants to increase the competitiveness of the model just as it did with other versions of it (the Way and Economy) and Fiat Strada Working in October. The price of the car rises R $1.000 (US$480): Novo Uno Vivace 1.0 3P (US$12.150) and Novo Uno Vivace 5P (US$12.960). The demand of this model has fallen 5% so far this year.

Two airbags, ABD and EBD are now standard in entry version of the Uno

Two airbags, ABD and EBD are now standard in entry version of the Uno

Yesterday Maserati launched the new Quattroporte in Nice, France. The car was presented officially to specialized press in an event hosted by Maserati’s CEO, Harald Wester. According to him, Maserati expects to sell 13.000 units of this new flagship next year (prices start around 145.000 euro). USA will count for a big part as they want to make use of 2.300 Chrysler dealerships all over the country. The Quattroporte is the first step of a 2015 goal of selling 50.000 Maseratis worldwide annually. Then will come the SUV Levante (aka Kubang) and a smaller sedan, the Ghibli. Finally, by the year 2015 the new GranTurismo and GranCabrio will make their debut (they are expected to be lighter and may use Alfa Romeo 4C base). Maserati sold 6.159 cars last year, and the fact they want to sell 8 times more in just 3 years makes some analysts not to believe it. IHS, a specialized provider of diverse global market and economic information, said that Maserati could sell 28.100 cars by that year. Others, like Euromonitor, think that the brand has the right reputation and clients coming from USA and China, but the target is “incredibly ambitious”.

Maserati wants to sell 13.000 units of its new flagship next year. Photo by: Autopareri.com

Maserati wants to sell 13.000 units of its new flagship next year. Photo by: Autopareri.com

Fiat has announced it will lay off around 1.500 workers, a third of its workforce, at its factory in Tychy, Poland. It is a response to lower demand of the cars produced over there. Fiat is the largest car producer in Poland and in 2009 they manufactured 600.000 units and this year it is expected to be under 350.000 cars. Volume for next year is expected to be around 300.000 units. Currently Fiat Poland produces the 500 for European and some Asian markets, its twin from Ford, the Ka, the second generation Panda and the new Ypsilon. However by the end of this month the Panda output will be halted forever as the new model completes one year in the market. The reduction of production levels is a fact expected by many as Fiat decided to move the production of the best-seller Panda to Italy. By that time Fiat said nothing would had happened to Poland output as the new Ypsilon was going to be produced in return. Nevertheless the Ypsilon is a popular car but only in Italy and now faces tough times with sales drop of 17% so far this year. It also means that Fiat may not be considering Poland for making its next C-Segment (aka Fiat Viaggio hatchback) for European market. Turkey or Serbia are in mind?

Source: ADEFA, Autoesporte, Automotive News Europe