Europe: “We need to get this issue under control”, Marchionne

Here there are the main highlights of Sergio Marchionne’s interview with Luca Ciferri, Editor-in-Chief of Automotive News Europe:

  • Inevitable the move of merging Fiat and Chrysler by the year 2014
  • Big effort on relaunching Europe operations
  • 2013 total sales target: 4.3 million from which 2.6 million (60%) correspond to Chrysler. It means Chrysler sales will grow 8% while Fiat ones would decline 6%
  • Problem with distribution of production in North America
  • “Success” for the coming Chrysler 200, to be presented in Detroit 2013
  • Regarding Chrysler 100 he thinks “is a great idea to provide dealers in the U.S. with two options in the compact segment”
  • If Chrysler 100 gets produced will come to Europe as the new Lancia Delta
  • Reason for poor results of Lancia Thema/Flavia/Voyager: selling a premium brand in a difficult market is tough. The market is getting smaller
  • The Dodge Dart effectively started rolling out in late September. The target is unchanged
  • He wants different body types for the next generation Chrysler Town & Country and Dodge Grand Caravan. Marketing study is on the way
  • Fiat 500 results in America: great product. Different approach from different people in charge of its sales
  • Jeep can reach 1 million units but it does not have the capacity right now
  • The new SUV from Maserati, the Levante, will be built in Mirafiori, Turin with a lot of the underpinnings coming from the U.S.
  • Jeep’s production in China: the company will remain in USA. It can do CKD units but everything coming from U.S. market.
  • Alfa Romeo to VW: “there are some things that are not available for sale… I have zero interest in selling Alfa”

Source: Automotive News

Bad pre-start for Fiat Viaggio in China

Photo by China Car Times

It is nothing related to sales figures. The new sedan based on the Dodge Dart that Fiat will sell from September had a terrible accident when it was part of a high speed test in Taicang, near to Shanghai. The model under test was a 1.4T which hit a motorcycle rider who died instantly. The two passengers inside the Viaggio were not injured but the car was severely damaged especially in the side. The 4.67 m long sedan will be on sale starting around 120.000 yuan (US$18.900) and is expected to hit the market in the C-segment sedans to compete with VW Jetta and Sagitar or others like the Buick Excelle, Hyundai Elantra or the Citroen C-Quattre. Last week Fiat showed the first pictures of the interior, which did not change from the Dodge Dart version in the US.

Unlike what happened in the exterior, the Viaggio kept its interior exactly as the American version

China: the countdown has finished

Today is a special day for Fiat-Chrysler Group. After some years dealing with unsuccessful joint ventures, the group has finally began its new age in China. Sergio Marchionne, Olivier Francois, and Mike Manley, among several others, have inaugurated the plant with their Chinese partner, Guangzhou Automobile Group in Changsha in central China. It is the place where from today the ‘Fei Xiang’ model (aka Viaggio) will be produced reaching in the first year 140.000 units  in a plant that can produce 400.000. Fiat has a lot of expectations about this product because it will be the last opportunity to finally sell a competitive car and get  an important part of Chinese sales. Last year the brand sold only 991 cars while GM or VW sold more than 2 million units. Although the group has arrived late in this important market there is a good mood about Italian cars and therefore they expect interesting results to reach 200.000 units by the year 2014, not bad, but very far from its European competitors. The Viaggio (aka Dodge Dart) is part of a new model that will be sold globally and is expected to arrive in Europe in 2013 with other body type to replace the bad sales figures of Fiat Bravo. Therefore it belongs to Chinese C-segment, the country’s largest: almost 5 million units sold that represent 20% of the market.

A Jeep Ad in China

But it is not the only news coming from China. Today they also began official sales of Chrysler 300 imported from America. That’s why the car will have a very high price in a unique version at 486.900 yuan or $76.000. The price will certainly affect its sales to become a car only for real fans as all its competitors from Europe (Audi-BMW-Mercedes) offer cheaper versions of their E-Segment cars. It means the official comeback of Chrysler but if they want to get an interesting piece of this important segment (6% of Chinese market) they must consider building it in China. Meanwhile Jeep is considered the brand with highest potential in China and that’s why Fiat may be considering building them in the same plant of Changsha (close to Hong Kong). In the other hand there is also Alfa Romeo, that according to Dunne & Co, a specialized company in Asian car markets, Chinese consumers love Italian fashion and Alfa could benefit from that feeling only if they offer the best products. A lot of opportunities that only confirm what Marchionne said: “We have a lot of work to do.”

Fiat-Chrysler begins its come back to China

After the presentation of Fiat Viaggio in Beijing Auto Show 2012, the Group is getting ready to enter the Chinese market with some of its brands. The Viaggio will be the, by the moment, the only product to be produced locally, but more products from Fiat brand as well as Dodge and Chrysler will soon join Jeep in world’s largest market. Fiat will be initially present with the C-segment sedan, and will import both, the 500 and Freemont from Mexico. The small one will be offered with some specific changes while the large MPV will be offered with the 173hp 2.4 engine. It is also expected the return of Chrysler with its big sedan, the 300C imported from Canada. After being produced in China during Daimlers era, this sedan will go back to China with its facelift and much better interiors to compete with of Germans in D-segment in large version configurations. Its launch will take place in June 26th and its price should be 500.000 yuans (US$79.000). Dodge is also getting ready. Some spy shots reveiled by the site CarNewsChina.com showed its Journey (is the Dodge version as the logo can be seen in the steering wheel). It means that China will be, as it is Brazil, another market to have both models available, Fiat Freemont and Dodge Journey. Nevertheless, it is expected the Journey to be more expensive as it will have a better engine of 283hp 3.6 V6. Its price is not expected to be far from Freemont which starts at $250.000 yuans (US$39.000). All of these models will join the only brand of the group that has not interrupted its presence in China, Jeep.

Dodge Journey/Fiat Freemont. Both models are available in Brazil and soon in China. Photo by autoesporte.com.br

Jeep models are available in China in 120 dealers. They are all imported from North America and it makes them really expensive SUVs. No matter its representation in the country has changed a lot during the last 30 years (its owners were always changing) the brand still has a good reputation among Chinese. Last year they sold 19.013 units, up 63% compared to 2010. Is a small number compared to competition but it can be seen as a good starting point for future sales with local production. In fact Fiat-Chrysler’s plan include the start of production in 2014. In the meantime, Jeeps will continue to be well recognized, and its sales will rise without reaching the big numbers local production means. It is because imported cars are highly taxed by Chinese authorities and it makes Jeep products really expensive: the Grand Cherokee starts at $576.000 yuans (US$91.000). All of that means that Fiat has a lot of potential but they need to start local production as soon as possible if they want a respectable place in this important car market.

The new Fiat Viaggio to come to Europe?

First they surprised us with presentation of Dodge Dart in Detroit. And then they went even further when they showed its cousin, the new Fiat Viaggio in Beijing. Most of comments online, both specialized media and common readers, were positive and crearly nice when watching the first images. Certainly it is a nice C segment sedan for a market that really likes big sedans with a lot of accesories. Fiat was one of the last car automakers not to have a full presence in China and therefore they needed urgently to come again (after 2 tries) offering the best of the best.

Fiat will build the Viaggio from July/12 to be on sale this year in the world’s largest market. The challenge will not be easy, as segment C is really crowded of options and represented almost 40% of total passenger cars market in 2011. Though some analyst have said that Fiat has arrived late in this important market, other sources indicate that what is really important is the fact they will offer a local product, with the latest technology, good shape and with the size most chinese people like. In other words, I believe the Viaggio can reach 60000 units sold during its first year with important growth in coming years as brand image begins to be recognized.

Nevertheless its possible results at home, by reading some comments in Spanish, Italian, and French sites, most of people have claimed the possibility of offering the Viaggio in Europe. C segment is Europe’s second largest car segment (the first in Germany), and the competition is really tough as its type of client is someone conservative who does not want to change the model, and who does not want to risk with unknown brands. It explains why VW Golf has been ruling Europe from so many years, others like Koreans have gained some market share thanks to their warranty offer, while others such as Fiat have had a bit of the cake and continue to decrease their market share.

Fiat Group needs to increase its market share in C segment in Europe. They have reached some important numbers with Alfa Romeo Giulietta, but as its demand begins to slow down, while Fiat Bravo and Lancia Delta are not at all popular, the situation must be changed as soon as possible. Is it the Viaggio a solution? personally I don’t think so, as this model is really big, does not offer a hatcback version (the largest part of C segment) and Fiat’s image as large car maker is not well known in Europe. For me, the best thing Fiat could do would be to offer it, after a deep make up, as the larger version of Alfa Giulietta offering also a SW version (very popular in Italy). It could increase not only C segment offers but Alfas’ range of models. So it seems this beauty sedan will take a long viaggio before coming to Europe.