Category Archives: Europe

by - 3 Comments

VW Up! threatens Fiat Panda’s leadership

If June was a bad month for the couple Fiat Panda-500, July was even worse. If it is considered sales figures of Austria, Czech Republic, Germany, Denmark, Spain, France, Greece, Italy, Ireland, Netherlands, Poland, Romania, Slovakia, Slovenia, Sweden and Switzerland, during las month 13.272 Pandas were sold, just 51 units above the sum of Up!, Citigo and Mii. It is the first time the German trio reaches that great result and now it is not only more popular than Fiat 500 but it seems it will beat Fiat Panda and maybe dethrone it in the next months. It is important to mention that in this monthly analysis it is being considered 3 models with 3 and 5 door versions for the VW/Skoda/Seat against one single model of Fiat 500 with only 3 doors option and the two latest generations of Fiat Panda, only available with 5 door body.  Anyway, the Panda has been always Europe’s best selling A-Segment car but it has had a tough time not only in its native Italy, where it dropped 17.5% compared to June figures, but also in all other countries except for Romania and Slovakia. The small Fiat fell 25% compared to June figures, much more than Fiat 500, down 16%, while the Germans are up 7%. The 500 is down everywhere in Europe except for Austria, up 17%, Denmark, up 3%, and Poland, up 68%.

In July the Up!/Citigo/Mii are more popular in Austria, Czech Rep., Germany, Denmark, Spain, Ireland, Netherlands, Romania, Slovakia, Slovenia, Sweden and Switzerland. They had a record sales in Austria, Germany, Denmark, Spain, Greece, Ireland, Netherlands, Romania, Slovakia and Switzerland. The situation for Fiat is really bad as two important things must be analyzed: first of all, it was July, a historical bad month for car sales everywhere in Europe, and Fiat models dropped but the VWs were up. And the second one is that the product with the deepest fall was the Panda, an all-new product on sale since January. Year-to-date records show that the Panda commands with a big difference but the 500 will be soon replaced as the second best selling A-Segment car by the German trio. If Italian car market continues to fall, while the Up! keeps rising in Germany, Fiat will not only lose and important market share in A-segment but will be in serious trouble in the next months. Of course the UK, not included due to lack of data, is an important market for the Fiat 500.

Green cells indicate growth compared to June figures. Red ones indicate fall. Source: http://www.bestsellingcarsblog.net

Click here to see Fiat Panda/500 vs. VW Up! August 2012

Click here to see Fiat Panda/500 vs. VW Up! June 2012

by - 3 Comments

Fiat-Chrysler 2012 First half results analysis

After some days waiting for official data now is possible to have a close analysis to Fiat-Chrysler sales figures in the main markets and most important models. The overall result could be considered more or less good though the troubled European market may change that at the end of the year. The whole group has sold around 1.8 million cars* in the first six months of 2012, up 5.7%, which is not considered bad in current conditions, especially taking into account that Italy counts for 13% of total sales and is a market that dropped 20%. It all means that the small growth in units sold is due to the great success most of Chrysler Group models are having in the US and Canada. Brazil would not be included in the list of good results as Fiat brand slow down its growth following the total market (-0.3%). The analysis by models shows two different worlds: Europe with terrible results for old products, and USA for good results for most of all the models, no matter the fact they are mostly old models.

ITALY

Italy is Fiat’s main problem nowadays. The dependence of the group is evident and therefore total sales and practically all models are having very bad results. What used to be Fiat’s best selling car now occupies a second place and is severely affecting the whole company. The Punto, which counts for almost 23% of the group sales and drops 32%, much more than the market, and than its rivals. The ‘restyling’ gotten at the beginning of the year has not had any effect because consumers of B-Segment seem to prefer the new generation of Toyota Yaris (a fall of just 5.5%) or the new Peugeot 208 (4200 units). Then comes the Fiat 500 that falls even more due perhaps to the fact that is now facing its 5th year on the market without any significant change (see analysis of Fiat 500-Panda vs. VW Up! for June 2012). These two models count for 76% of main models fall. But in terms of percentage fall, the winner is the C-Compact Bravo with a spectacular fall of 47%, or 6.063 units less. This car is not old at all but the positioning given by the brand has not been the best allowing the VW Golf to keep its pole position among C-Segment cars. Nevertheless the german compact begins to suffer the consequences of its old age which can be seen by the good result gotten by the Giulietta (the best selling compact in April, May and June), which ‘only’ falls 18%, but is an alarm sign to Alfa as it is the only competitive product and is just 2 years old. Other really bad performers are Alfa MiTo, which just sold 16% more than Mini and 20% more than Audi A1, and Lancia Delta, down 36%. In a market that falled 20%, the Panda, Ypsilon and Freemont did quite well. The new generation Panda helped this popular model to maintain its sales figures and allowed it to become the country’s best selling car by far. Same situation for the Ypsilon, very popular in Turin. Fiat as a brand falled as much as the market, while Lancia did better only falling 11% and Alfa Romeo dropped 31%.

Total sales of B segment main models in Italy. The latest launches had the best performance, while those with more years in the market dropped their sales. Source: http://www.bestsellingcarsblog.net

Although Giulietta’s sales have fallen in Italy during the first half, it was Italy’s best selling compact car (C-Segment) in May and June. Very bad results for the Fiat Bravo. Source: http://www.bestsellingcarsblog.net and http://www.unrae.it

Thanks to new Panda, Ypsilon and somehow the Giulietta and Freemont, Fiat Group has been able to rise its market share in Italy. The evolution of each model is compared to the performance of each segment according to UNRAE. Source: http://www.bestsellingcarsblog.net and http://www.unrae.it

Fiat Group’s model composition in Italy during the first half of 2012. Source: http://www.bestsellingcarsblog.net and http://www.unrae.it

USA

As usual, American sales figures are just amazing. The total market has returned to pre crisis numbers but Chrysler Group is doing much better, eventhough the new entry model, Dodge Dart, is available from late June. The Ram grew 24%, much more than its rivals, thanks to the good results got by the luxury versions. If rumors are confirmed, a diesel version would have a positive impact for the rest of the year. But in terms of the largest impact on the total growth on sales, the Chrysler 200 is certainly the main character, because it represented 16% of total growth, or 37.000 more cars. The deep facelift that received the Chrysler Sebring has made consumers to come back to Chrysler in the C-Segment. Besides the good Ad campaign regarding its American origin has given it more awareness among consumers. With less sales figures but equal interesting results, the Chrysler 300 took off, up an amazing 200% (anyway it is still far away from its rivals, most of them already renewed). As most of models had great performances (thanks to better economic situation), only those having bad results deserved a close analysis: the old couple Compass/Patriot did not well during the period. The Compass falled 1%, while the Patriot grew 12%, below total market. It is clear that these models are old enough and competition gets really hard with all new models, but it is weird that the Compass and not the Patriot falled when the only the first one had an interesting restyling. Another fact to consider is that minivans don’t count in Chrysler’s sales as much as they did one year ago, and now Jeep Grand Cherokee and Wrangler occupied the second and third place of best selling Chrysler models. The group, included Fiat sales numbers, grew up two times more than total markets allowing it to increase its market share up to 11.5%. By brands only Dodge/Ram had stable growth, while Chrysler had an amazing growth of 75%, Jeep up 28% and the Fiat 500, up 319% to 20.706 cars, more than the whole year 2011.

The Fiat 500 had the best performance compared to H1 2011. Anyway most models did better than the whole market. It is weird what happened to Dodge Durango which has been on sale for less than 2 years, shares platform and components with the successful Jeep Grand Cherokee. Source: http://www.goodcarbadcar.net

The figure shows the total units sold during the first half and then the change in terms of percentage and units. After that there is the contribution of each model to total growth in terms of units. Chrysler models are the ones which contributed the most for the total growth. Source: http://www.goodcarbadcar.net

EUROPE

Outside Italy the situation is really bad. Without taking into account UK and Austria figures (only Czech Rep., Denmark, France, Germany, Greece, Ireland, Netherlands, Poland, Slovakia, Slovenia, Spain, Sweden and Switzerland), the main models of the group sold 115.275 units, down 17.5%, a bit less than what happened in Italy. Of course not all the markets had the same performance as the largest ones had the deepest fall: France down 25%, and Germany down 13%, compared to a total fall in France of 14% while Germany grew 0.7% (part of that growth due to self-sales). But the top 9 models had the worst fall in Greece, a market that dropped 41% in the first half. Spain, other troubled market, surprisingly was good for these models, which grew up 4%, or 500 more units. Once again the Fiat Bravo got the worst figures falling in all markets as a response to Fiat’s decision of reducing the range and options. Germany has been the largest market for the Punto after Italy, but this year the model has fallen 48% over there, even more than the fall seen in Greece, but less than the horrible result in Spain and the Netherlands. Certainly the model is not anymore popular. The Panda had good and bad results but in general the car continues to be popular, though its total result was severely affected by the deep fall in France, where the market is going bad. As in Italy Lancia goes better thanks to the Ypsilon, which had excellent numbers in terms of growth but still low numbers in terms of units delivered. One year ago the old model barely sold one thousand units but with the arrival of the new 5 door generation the Lancia sold 4 times more, and is especially popular in Greece where it has become one of top 20. Alfa Romeo does not do good at all with its 2 models falling in the ranking, especially the MiTo, which never had good results. In terms of the dependence of the models on the Italian market the situation changes a lot according to the car. Without any doubt the Fiat 500 is the most international model of the group as only 34% of its sales are done in Italy. Surprisingly the Alfa MiTo is the next model to have less sales share in Italy, as 52% of them are done outside Italy. It is certainly interesting to see the result of the MiTo taking into account that the Giulietta is more popular. The Lancias continue to be popular only in Italy and it seems the new generation Ypsilon will depend on Italian market no matter the fact is built in Poland.

This figure shows the Export ratio of Fiat Group’s main models in Europe. The Fiat 500 is the one less dependant on Italian market thanks to great sales in the UK, France and Germany. On the other hand there is the Lancia Ypsilon, whose new generation has not been able to change its strong dependance on Italy. Europe includes: CZ, DK, F, D, GR, IR, NL, PL, SK, SL, E, S, Switzerland and the UK. Source: www.bestsellingcarsblog.net

Sales growth of each model in each market for the first half of 2012. Good results for the Ypsilon, Freemont and 500. To bad for the Punto, Bravo and MiTo. Source: http://www.bestsellingcarsblog.net

One year ago the Punto was Fiat’s best selling car outside Italy (28% of total sales). In 2012 H1 the fall of its sales allowed the Panda, 500 and Ypsilon to have better share among Fiat models. Source: http://www.bestsellingcarsblog.net

BRAZIL

In Brazil the analysis gets larger as more models are really popular over there. The market is stable with a tiny fall of 0.3% and is expected more sales in the second half thanks to some incentives given by the government. In this context Fiat continues to be the leader and keeps its market share above 22% thanks to one single model, the new Palio. Its registrations have risen 63% and is now the third bestselling car of that country, but it is still far behind from the king of the market, the VW Gol. Although year-to-date numbers are still low, the arrival of the new Siena, aka Grand Siena, has made of this model another great performer and the results will be seen at the end of the year. The Uno, in its second year, falls 11% partly because of the arrival of the new Palio, which could be catching some of its sales (Palio is B-Segment and Uno is A-Segment, but they are close in size and prices), and also because of the success the facelifted VW Fox is having (up 19%), also from A-Segment. But the worse comes from C-Segment: the Linea falls 36% and it seems it will continue like that until a deep facelift arrives. The Bravo stopped its fall in the last month thanks to new engines and features. Good for the Punto (-2%) which got its first deep facelift in July/12, and the Freemont, with 1 thousand units sold per month, not bad considering its high price. The small 500 is doing also good allowing the Toluca plant to keep working. For the second semester things will get hard for Fiat with the arrival of the facelift of VW Gol/Voyage and the all new Hyundai HB20, exclusively designed for Brazilian market.

The new Fiat Palio has had a great start. The new Siena will also change total year’s result. Source: http://www.bestsellingcarsblog.net

CANADA & ARGENTINA

The situation in Canada is not as spectacular as in USA. Chrysler group (included Fiat 500 figures), had the same growth of total market, but it is much more than its competitors from Ford and GM. Actually the group has the second place and sells more than GM, but is now facing the threat of a strong Toyota in fourth place and growing much more. Fiat sold 4.920 cars, up 92% and it seems the small 500 has reached its maximum. The Ram (up 16%) and Grand Caravan (down 6%) are among top 5 best selling cars of that country. In Argentina where total market continues its instability, Fiat is doing good with the new Siena, up 10%, the Uno, up 11%, and the Strada, up a massive 74%, or 2105 units more. Bad for the Palio (the new generation just began local production some weeks ago), the Punto (the restyling will arrive by the end of the year). The small 500 sold almost 2.000 units.

The Fiat 500 sells more than many other Chrysler models. Source: http://www.bestsellingcarsblog.net

*Fiat, Lancia, Alfa Romeo, Chrysler, Jeep and Dodge.

Source: www.carsitaly.net, www.bestsellingcarsblog.net, http://www.goodcarbadcar.net

by - 6 Comments

Italy’s bad results affect Fiat 500-Panda in its battle against VW Up!

Once again the monthly report about the impact the small car of VW is having on Fiat 500 and Panda’s sales. In June things got worse for the Italian couple because of only one country: their native Italy. Compared to May figures, the 500 and Panda grew in most markets except for Italy, where both models falled 26% for the 500 and 15% for the Panda, against the VW Up! which was down 17% in that market. The stong fall in Italy made total European market figures to go down 5% and 4% for the 500 and Panda, while the VW was up 4%. Certainly without taking into account Italy, both Fiat would have had much better results, specially in Germany and France. The 3 models of VW, Up!, Citigo and Mii, got record sales numbers in Germany, which counts for 42% of its total sales. Meanwhile Italy represents 43% of Fiat 500 sales in Europe (the UK is not included) and a massive 63% of Panda figures. At the sixth month of the year, the VW beated the Fiat couple in Austria, Czech Republic, Germany, Denmark, Ireland, Netherlands, Romania and Sweden.

May and June 2012 sales figures for Fiat 500-Panda and VW Up, Skoda Citigo and Seat Mii. Source: http://www.bestsellingcarsblog.net

For the first half of the year the situation is still good for the Italians as they combined sold 3.2 times more than the 3 VW. The Panda continues to be the best selling A-Segment car in Europe but it is really dependant on Italian market, something not good nowadays. The new generation is doing good but not as the second one, which was on sale during better times. The Fiat 500 is also doing good but the arrival of the VW trio will continue to impact its sales and maybe could lose its second place among A-segment cars in Europe. If the UK is included the results are better for Fiat, specially for the 500, which has been in the top 10 for 2 consecutive months and is 12th best selling car of that country. In that case the Panda would continue ruling with more than 102.000 units, followed by the 500 with almost 75.000 (23% of them sold in the UK), and then the german trio with more than 54.000 units. These results can be analyzed from several points of view. For example, the VW cars are completely new cars coming from Europe’s largest car maker and offering 3 and 5 doors. In the other hand the Fiat 500 is pretty old, with more than 5 years in the market and a bit more expensive. Anyway the couple from Fiat must work harder to keep their place in the ranking. VW will lead in Germany, Denmark, northern Europe, Austria and the Netherlands, but Fiat must keep its position in Italy, France, Spain and the UK.

Sales figures for Fiat 500, Fiat Panda and VW Up, Skoda Citigo and Seat Mii for 2012 H1. Source: http://www.bestsellingcarsblog.net

 

 

Click here to see Fiat Panda/500 vs. VW Up! July 2012

Click here to see Fiat Panda/500 vs. VW Up! May 2012

by - 5 Comments

Is Marchionne doing wrong?

Sergio Marchionne has been Fiat Group’s CEO since 2004. By the time he became the Amministratore Delegato, Fiat was facing very tough times due to an internal crisis that began some years before. Sales figures of all group’s brands were struggling with problems in Italy and all over Europe, as they were trying to solve the divorce with GM. Marchionne found a company full of bureaucracy and with several problems. By the end of that year Fiat Auto sold 20.539 million euros and lost 840 million euros*. It was another bad year for the Italians who were suffering the consequences of very bad decisions taken some years before, during the 90’s when the whole group failed with lot of products all over Europe.  No matter the success of the 2 first generations of the Punto, and the arrival of the new Panda, in 2004 the situation was really dramatic and one of main reasons were quality and after-sales problems. The last years of the 90’s were not really good years to remember. Fiat was introducing a lot of models but forgot that good quality was emerging as one of key factors taken into account by consumers. Eventhough they had unique designs, cars like the Fiat Bravo/Brava, and Marea, Lancia Dedra, Kappa, and Thesis, or the Alfa 166, lacked of good quality and they were made with very low cost materials. Besides, the 3 brands were not quite well represented in several countries of Europe, something that affected the quality of after sale service. Those bad decisions in terms of the quality of the product had a big effect on Fiat’s position in Europe explained by the fact that the Italians were Europe’s largest car maker by sales figures in the 80’s and by the end of the 90’s its market share was dropping significantly. Fiat was no longer the leader.

Fiat Bravo/Brava presented in 1995. Though they had a unique design, their quality was below the average of the segment. A flop

Nevertheless, the arrival of Marchionne meant a big change on Fiat’s understanding of making and selling cars. By focusing on the launch of fresh models with better quality and calling off the agreement with General Motors, Fiat experienced a period of recovery and a better position in Italy and abroad. The first product to prove it was the Grande Punto, launched in 2005 as the third generation of the successfull B-Segment model. They offered a new car with great engines and soon the company realized the importance of efficient and low emission engines. In 2006 Fiat had the largest sales increase in Europe with 18%, above VW Group, the French and Americans, in a whole market that grew only 0.7%**. Certainly the new Punto played a key role on this result (its registrations were up 22%). Eventhough the quality was not still a main characteristic of the group’s products (the Alfa 159 launched in 2005 is a good example), consumers appreciated the new products. But Marchionne did not stop, he wanted more and he wanted to impress the market. That is why in July 2007 Fiat presented what can be considered its best product of the last 3 decades, the new Fiat 500. And they certainly hit the market with a unique car and all-new marketing strategies. In 2007 Fiat Auto (Fiat + Alfa + Lancia) sold 1.847.714 vehicles world wide from which almost 800 thousand were delivered in Italy***. One year later they sold the same amount, but in 2009 Fiat Auto sold 2 million cars , up 9%, thanks to a record year in Germany (Government support to car industry) and Brazil. By that year two events took place and changed Fiat history: the begining of international financial crisis and Chrysler bankruptcy.

The presentation of the Fiat 500 in Turin in July 2007. The small car represents the era of Marchionne and is perhaps Fiat’s best product in the last 3 decades.

What was considered as crazy move by most of specialized press, resulted in Marchionne’s best play. As is usual on him, he saw what most of people could not see. He anticipated European automotive crisis and therefore he decided to purchase Chrysler no matter the bad future it had by that time. Fiat needed a partner to expand its business and ensure its future. Marchionne knew this partner was going to be essential for the coming years. And he was right. 3 years later is not Fiat saving Chrysler but the opposite. And of course the ‘miracle’ experienced by Chrysler is the result of very good decisions made by Sergio Marchionne and his team. The recovery of the Pentastar was another goal of the Italo-Canadian manager. In 2009 he saw that Europe was in the way of collapse in terms of car sales, and that’s why he bought Chrysler so Fiat could survive. After that the story is well known by everyone. The Chrysler/Dodge products arrived in Europe as Fiat/Lancias, with very low sales objectives as the conditions of the market were getting really bad. The rebadged Chrysler 300 and Voyager was a really controversial decision but at the end is part of a mid-term strategy to give Lancia some oxygen for the coming years. At the end Lancia and Chrysler will develop their models and adapt them to their markets. If it was or not a good decision does not really matter as these models (Lancia Thema, Voyager and Flavia) are not expected to have brilliant sales figures (original sales forecast for the first year of both, Thema and Voyager, were 10.000 units each, but Jan-May/12 sales figure indicates only 800 cars were sold so far).

This figure shows the evolution of sales of main models of Fiat since 1988. Notice the continous fall of Fiat Punto since 2001, the growth of small Panda and 500, the flop of C-segment with the latest Bravo, and the disparition of D-segment. Source: http://www.bestsellingcarsblog.net

But the European automotive crisis is being worse than expected and all problems behind it are daily news. Most of all European markets drops with significant falls in what used to be one of world’s largest markets: Italy, Spain and France. The fact that car registrations fall up to 2 digits every month and the trend does not change, has turned on the alarm of all automotive CEOs. Europe is not anymore the big and healthy market of more than 15 million cars per year. Those years could be considered not only the good past but also the unreal one, as it seems car sales figures were extremely high and contaminated by government helps. Europe will keep buying cars but much less. The problem is that all car makers built their European future based on the best years and therefore they increased their production capacity with more and more plants and employes. Of course, with current conditions it is not feasible to keep the statu-quo. Things must be changed in order to face the coming years. First it came the disparition of Saab and then the big problems of the big of Europe: Fiat closed its factory in Sicily in december/10, and now PSA is fighting with French government to fire 8000 employes and close one of its French plants. The same is happening to Ford and Opel. VW sees how its best sellers Golf and Polo decline their registrations. All these problems are the consequence of a market that does not buy as before because of an economic crisis that affects all.

This figure shows the position got by main models of Fiat Auto since 1988 in Europe. In 1997 the Fiat Punto was Europe’s best selling car but its leadership has fallen and is no more in Europe’s top 10. Good evolution of minicars with Panda and 500. Notice how far is the current Fiat Bravo from the great places gotten by its predecessors in the 90’s. The same situation for D-segment where Alfa has no more representation. The Ypsilon has had a continuos fall and is no more in the top 50. The other Lancias are not popular at all. Source: http://www.bestsellingcarsblog.com

In this context Fiat’s position is not the best. It depends a lot of Italian market, one of region’s most affected. Besides, there is the debate about Italian competitiveness and labor conditions. Fiat is having aditional problems with its labor force in Italy and this is making it more exposed to the crisis. They are losing money with Italy as their plants located world wide are more competitive and generate more cash. But again is something well known by everyone. The point is the way Sergio Marchionne wants to get out of the crisis. Certainly his decisions cause always controversy. People may agree or disagree but at the end most of them recognized he is perhaps Fiat’s main ‘asset’. His capacity of work and the way he anticipates the future are without any doubt a great tool for Fiat-Chrysler group. Now, after 8 years managing the company, he must take the hardest decisions ever. And is when more controversy appears. He wants to reduce Fiat’s dependance on Europe by increasing Fiat-Chrysler presence in Asia. He wants to find a partner to become more global. He wants to increase Fiat’s capacity in Brazil. And Europe? in Europe he wants to wait. He believes the worst has not occurred and he prefers to delay the launch of several new models. Why? he believes doing the opposite would mean a suicide with current conditions. It means that a key model such as the old Punto will have to wait for its successor. It means Fiat’s decision to surpass the crisis is by doing and expending less. But is it a right decision?

The Punto is with the Corsa (both share the same platform) the eldest of the segment. French are the latest to arrive with awesome products.

Fortunatelly just before the crisis began, the new generation of Fiat Panda was almost ready. It allowed the best seller to ensure its future with a modern successor. But things do not work like that for the rest of the range and becomes dramatic when taking into account that Marchionne’s decision of delaying new launches includes the successful and vital Punto. Yes, he might not consider the fact that the B-Segment car has been Fiat’s main product for the last 19 years. The same situation applies for the other segments: in the C-Segment the Bravo will have to wait until late 2013 for a successor that will come from China, the Giulietta won’t have the expected Station Wagon version until 2014, while the Delta will be in the catalogue for at least 2 or 3 more years. Alfa will wait till 2014 to see the new Giulia for D-Segment while the MiTo won’t have a 5 door version till the same year. The SUV expected for Alfa Romeo has not even a date of presentation. The only progress to be seen in the horizon is the 500 family that will be enlarged by the arrival of the 500L by September 2012, and then in 2013 the presentation of the 500X (the small SUV). It is my believe that Fiat can delay all future launches of its cars but should not jeopardize the future of the Punto. Marchionne must have very solid reasons to put off the new generation and he constantly says that starting production of the new generation with current market conditions would be flop. And of course car companies as all others exist to earn money. If his financial and market forecasts tell him it is not the right time to launch the new Punto, then he is right. Yes, nowadays Europeans don’t buy cars as before and it seems it will be like this for 2 or 3 more years. But there is something wrong in all this. Or at least is what I think.

20 years ago Fiat was strong in A, B, C and D-Segments. Nowadays it is just popular among mini cars. Slowly it has lost presence in larger segments, as it does not have anymore D-segment models, while in the C-Segment is losing a lot of market share. The next segment to be affected by the lack of new models will be the B one.

Fiat is not VW. It means it does not have the financial strenght to allow itself to mistake. VW can have problems with its gear box in China but its excellent position in the market allows it to answer to this problem in a short time offering the best solution. Fiat-Chrysler does not have the right to do wrong as it has had lot of problems in recent past. And is this particular topic in which I consider Marchionne is repeating the history. Fiat did wrong in the 90’s with quality problems and still suffers the consequences of bad image in the whole continent (Italy included). They realized how important is to do the right things. Now, for the first time, I disagree with Mr. Marchionne and I believe they are making a mistake as big as the one of the 90’s: they abandon current clients and tell them to move to other car makers as Fiat products don’t change. As simple as that. Yes, Fiat is saving money or at least not losing it by investing in the development of new cars. And yes, it does not make sense to invest in new C or D-Segment cars when the position of the company is not really strong in those segments. But the situation changes when talking about small car segments, Fiat’s core business. What is more risky? to invest in the launch of new Punto and the sequent low sales proper of current situation, or to lose the current Punto clients and then have less market share in this important segment? people may be delaying their decision of changing their car, but at the end every month there are almost 1 million Europeans doing so. The market is smaller but it exists, and Fiat should think about it. Or why Peugeot just launched the 208? Or Renault presented the awesome new Clio? they have the same problems of Fiat, but eventhough they continue. At the end the only beneficiary of this decision will be VW and Koreans who will increase even more their market share. If Fiat wants to sell more they must offer more. The 500L is a product that can work but is not enough. The MiTo and Ypsilon are not competitive and do not offer anything new. Dealers can not wait more for new products. European autoshows can not continue being the scenario for lack of new products. Alfa Romeo can not resist anymore with only 2 models. Fiat-Chrysler should act according to how the market evolves. They should forecast not only sales but also the production and future development costs. Just time will demostrate how right is Marchionne’s decision. But time will also prove how difficult will it be for Fiat to regain the lost clients, who will be surely inloved with their VW Polo, Peugeot 208 or Renault Clio.

* DATI PRELIMINARI DELL’ESERCIZIO 2004 E RISULTATI DEL QUARTO TRIMESTRE FIAT Spa

** Fiat sales boost leads Europe in 2006. Fiat News New Zealand

*** http://www.carsitaly.net

by - 4 Comments

Here comes the Fiat 500L

Fiat released more official pictures and all information about its latest product, the compact minivan Fiat 500L. The official presentation will take place today in Turin at the Officine Grandi Reparazioni, 5 years later after the awesome presentation of Fiat 500 also in Turin. According to Fiat press, this car will be distributed in more than 100 countries including the US where will arrive in 2013. They also revealed some details of the B-Segment MPV: 4.15 m long and 1.78 wide. The trunk has a capacity of 400 liters and thanks to ‘Fold&Tumble’  system it can be enlarged up to driver’s seat with flat floor. There are more than 1500 possible configurations for the room inside and for example if the user wants he can recline front passenger seat and integrate it to the trunk and therefore have a total lenght inside of 2.4m. Regarding engines Fiat comes up to ‘leggerezza’ idea or lightness in the sense that they offer ‘small’ engines with interesting power and very low emissions and fuel efficiency. Two petrol engines, 0.9 TwinAir with 105 hp and a 1.4 with 95 hp, and one turbodiesel 1.3 Multijet 2 with 85 hp. According to Fiat the TwinAir 105hp has a emission record of only 112 g/km, which is very slow compared to other cars and taking into account that is a minivan for 5 people. In 2013 there will the time for Methane, Natural Power with TwinAir system.

Fiat 500L only for 5 people. In the future there will be also available the 500XL with 7 seats

Inside it offers a 5″ touch screen of multimedia system, one of largest of the segment. There is possible to manage the radio, cellphone, mediaplayer, iPod, and also internet. Fiat calls the system as Uconnect and they say in the passengers will be able to go online in Facebook, Twitter or go and see how the weather or traffic conditions are. There is also possible to see all info regarding Drive LIVE system, which is the evolution of eco-friendly application developed in 2009. This system allows the driver to receive live information about his way of driving and telling him how to improve it and then save gas and produce less emissions. Then, the driver can save the information in a USB or a smartphone. Fiat says that with this system a common driver can reduce consumption by 16%. Regarding interior roominess they were inspired by cab forward idea which reconsiders the idea of the interior of a car to get more exterior visibility and great interior luminosity. To get it the 500L interior is all surrounded by glass surface allowing to have the best luminosity of the segment. The car is avaiable in 4 different versions: Pop, Pop Star, Easy and Lounge) and 3 different colours for the roof. At the end there are 333 different possible combinations. It is the first time Fiat offers a premium sound system in a car. In collaboration with Beats Audio. One unusual thing is the Coffee machine inside the vehicle made in collaboration with Lavazza. It is the first car to offer a real coffee machine thanks to capsule technology ‘A Modo Mio’ integrated to the car.

The 500L is produced in Kragujevac, Serbia after 3 years of intense works to adapt old Zastava’s factory and get ready for export markets. Fiat invested more than 1 billion euros  with more than 2500 workers. The plant can produce 700 cars per day. Fiat intentions are to sell the car first in Europe, just after this summer, and then in 2013 begin to export to the US market to continue the success of regular 500 that again had very good results during June/12 with more than 4.000 units sold. Fiat wants to sell around 40.000 units for the first year and then rise up to 55.000 when the sales in America reach its highest. The 500L is part of Fiat’s idea of increasing the success of Fiat 500 in other segments and create an entire family of small, practical and unique cars with strong character. It replaces both, the Multipla and Idea minivans and belongs to B-MPV segment to compete with Citroen C3 Picasso, Renault Modus, Opel Meriva, Ford B-Max, Lancia Musa, Toyota Verso-S, Subaru Trezia, Nissan Note, Honda Jazz, Hyundai iX20 and Kia Venga.

This kind of vehicle has become more popular in the last years but still has a low market share as people prefer larger minivans. In 2011 more than 540.000 units were sold in Europe, and the  main markets by number of units are Germany, Italy, France and the UK, but is Slovenia, Switzerland and Austria were they have more market share. Outside Europe, they are really popular in Indonesia and Japan. Fiat will have to make a big effort to positionate again a B-MPV segment as their last product, the Idea, was not really appreciated by public. For what they have created I think it will be a success and people would love to see an large 500 with more roominess inside.

by - 10 Comments

Mondial de l’Automobile Paris 2012, the news from Fiat-Chrysler

Paris Autoshow is the next important car exhibition show in Europe. It will take place from September 29th till October 14th 2012 and is expected to be a regular autoshow without any espectacular launches due to European economic crisis. However it will be the place for the introduction of new generation of Renault Clio (the most important car in the event) and some other important cars from Germany. As it gathers all major auto press of the world, all car makers should introduce whether  a new car, a revised or new versions of existing models. From Fiat-Chrysler Group there will not be a lot of news. This is because Fiat is delaying all its launches waiting for better times and because the group is now focusing in other important markets with higher potential such as China, Russia, India or even Brazil or USA.

This is the render for Maserati Quattroporte 2013 shown by Italian car magazine, Quattroporte

The most interesting launch of the group will be the new generation of Maserati Quattroporte. It is expected to be larger, more powerful and luxury to gain more market share as the brand wants to reach 60.000 units by the year 2014 from 8.000 units sold last year. According to Quattroruote magazine, it will be lighter, but larger and will be moved by a V8 and V6 engines. Though they say it will be only presented in Detroit 2013 because they Fiat guys will be concentrated in the arrival of Super Ferrari with more than 800 hp. Another release will be the Fiat Panda 4X4, based on the current Panda but higher and better suspension. The mini car is suposed to hit the market as the unique full four wheel drive available with interesting prices. Of course there will be place for the Fiat 500L and maybe they could show the 500XL, but the reality should place it in Geneva 2013. Maybe new versions for the Fiat 500, while the Punto could get more engines. Ferrari, as said before, will show its new super car to replace the Enzo, and is expected to have more than 800 hp. Certainly it will be one of the stars of the event. From the other brands nothing new.

It shows how it looks the new Fiat Panda 4×4 according to carscoop.blogspot.com

Is a pity brands such as Alfa or Lancia, or even Fiat don’t have anything really new. Paris is a big event where all Europeans brands show their best. It would be the perfect place to present new generation of Fiat Punto, that should not be delayed anymore as it is a core product of the company. Alfa Romeo should have the new Giulia or at least the Giulietta Station Wagon or MiTo 5 doors, but again they will take more time and therefore there will be less sales. Lancia should present a deep restyling of the beauty Delta, which is rapidly loosing market share in Italy. Maserati should not only present the new Quattroporte but also the new E-segment sedan (supposedly called Levante) if they really want to multiple their sales by 10. And Jeep should be thinking of a great successor for its compact Compass. Marchionne could be waiting more time to save some money, but consumers might not be waiting more to change their car. And it works even more when talking of the Punto. Paris 2012 will be the place.

by - 6 Comments

The lack of competition and disgrace of Alfa and Lancia

To describe Alfa/Lancia situation and think of their future is a difficult thing to do, besides becoming a bit boring as is a frequent topic among car specialists. However, the fact that both brands are perhaps facing their worst crisis ever, is a good reason to go deep and find the origins of this bad situation and maybe find a solution. One of the main characteristics of capitalism is competition. In an open market the usual thing is to find several offers competing to get customer’s attention and purchase. It has worked for centuries and has become the rule for modern world. Competition is getting hard as globalization allows companies from every corner in the planet to sell their goods or services globally. It works like this for every sector and, though it may be considered unwanted sometimes, is really important for the health of a company.

Alfa Romeo Giulia Sprint GTA and Lancia Fulvia in late 60’s. Photos by Stelvio.dk and Straightspeed Blog

Before they were absorbed by Fiat, Alfa Romeo and Lancia had the worst of the wars between them. With a lot of differences, their goal used to beat each others’ in order to get more sales piece of Italian premium segment. Their rivalry was even seen in races while they were always launching new models, most of them extremely popular and still remembered today. The fact that they were always trying to beat each others’ allowed them to survive to several crisis and at the same time become more and more competitive with interesting offers. That is why successful models like the Alfa Giulia, Duetto, or the first generation of Giulietta, or the Lancia Fulvia, Stratos or first generation of Delta were all conceived. They used to work really hard to win the match. Great products, the best quality and awesome designs were the result of this fight. And it was certainly a good thing for them as they were growing up always innovating and becoming better. That’s how competition works: if one wants to survive one needs to work hard, otherwise you are out.

Alfa Romeo 164 and Lancia Thema in late 80’s. One of first models of both brands under Fiat hands. Photos by Octane and Auto-Types.com

Lancia became part of Fiat in 1969 after the acquisition of Ferrari and Autobianchi. Then in 1987 was the turn for Alfa Romeo. Both brands are now part of Fiat Group and are dealing with a lot of problems to survive. So after decades of hard competition Lancia and Alfa Romeo stopped looking each other as eternal enemies and became brothers of Europe’s largest car maker by that time. Certainly the move by Fiat allowed both brands to survive, but at the same time it created their worst problem: the lack of competition. Without any direct competitor their work became easier in the sense that they did not have to worry so much about what the other one would be doing. Now they were part of the same company and they could share projects and save money. In one hand this allowed Fiat to concentrate its power in Italy with several brands, but in the other one the lack of competition made of these 2 brands to become ‘lazy’. No competition, no worries. No worries, no development. And no development (or at least slowly development) is the main cause of the problem they have now. One would think that there is in fact competition, and a real tough one: BMW, Mercedes and Audi are very strong nowadays. And yes, they are now the rulers of premium segment even in Italy as Alfa and Lancia are not competitive and lack of real premium products. But by the years they were absorbed by Fiat, European markets were not as opened as they are now. There were more restrictions to imports and at the same time more government help to Fiat Group. In this context, they did not really have to worry about premium segment as they had the whole market for them.

Alfa Romeo 146 and Lancia Delta in mid 90’s. Photos by coches.net and lancia.es

The same situation would apply to Fiat brand but with less bad consequences as it has opened its market outside Europe. Nevertheless, Fiat became Italy’s unique car maker without any direct competitor after buying all its Italian competitors. In the 80’s Fiat used to be Europe’s largest car manufacturer thanks to its successful models like the Uno and first generation of Panda, which were not only popular in Italy but everywhere in Europe. Even VW used to take Fiat as a referent of the market to develop its products. Actually the first generation of VW Golf was conceived taking as a reference the Fiat 128. But then without any direct competitors in its native Italy, Fiat had nothing to fear and began to be less strict in quality while its competitors from the north were working harder. At the end it is known the result. The lack of competition had a very bad impact on Fiat’s development. Something that did not happen in Germany, France or even Sweden. In the first country VW had to deal with Ford and Opel, Audi did the same with Mercedes and BMW, while in France Renault was always working to beat Peugeot-Citroen. In Sweden Volvo was working more and more to fight properly with the extinct Saab. Meanwhile those brands who ruled alone in their countries were absorbed by others: Skoda and Seat by VW.

Latest Alfa Romeo Giulietta and Lancia Delta. Photos by netcarshow.com and worldspeedcrewcup.com

But inside Fiat Group there is also the opposite case that confirms that the lack of competition is harmful. Ferrari is perhaps Fiat’s most successful brand in terms of recognition and good awareness. Its success can be seen not only in F1 championships but in sales that grow every year. Those good numbers have been the result of hard work always trying to beat its eternal rival, Lamborghini that became part of VW empire some years ago. Both companies continue to compete without contemplation and that is why they offer the best of the best. It all proves that competition is good and necessary, and car makers must be careful about going forward to keep their place and always offer the best. Alfa Romeo and Lancia did not do it like that and now they suffer the consequences, but is time to think of the future and possibilities for them to survive and find a place in the market. Personally I think Alfa Romeo has more potential as it can become the perfect brand for pure Italian fashion mid size sedans and sporty cars just one step before the German premiums. People love Italian style and it’s recognized everywhere, so why not make useful of this and positionate Alfa as the stylish brand of the group? with Lancia is more difficult. It has lost its past of sportiness and has not been able to be known as a real premium brand though the big effort made by Fiat. People just don’t know about it or don’t believe in their luxury ‘wanna be’. For me Fiat must accelerate the integration with Chrysler and become of Lancia the italian chic brand for family cars with some touch of elegance and luxury. Now that both brands work together, they should focus on their future.

by - 6 Comments

The VW Up! takes off and hits Fiat 500

After the first analysis made by FGW about the sales performance of the new Fiat Panda and VW Up! and the Fiat 500, it is time to see how were May figures to these 3 minicars. When VW Up! was finally available in the market there was a special attention on how the leader of the segment would respond and how consumers would change their mind and shift to Europe’s largest car maker. 5 months after official launch of the German minicar and third generation of Fiat Panda, things began to get complicated to Fiat. Or at least is what sales figures show. Because from what happened last month there can be several different analysis and approaches as the comparison is made among two different family cars: in one side there are the 3 VW, Up!, Citigo and Mii, all in 3 and 5 door versions. And in the other hand there are Fiat 500 (only 3 door) and Fiat Panda (only 5 door). But results can be seen also from the different moments they are living: the Germans and the Panda are enjoying their first months of commercial life, while the unique Fiat 500 will soon have its 5th birthday (July 4th) without any specific facelift or deep change. However here are the results.

Fiat Panda’s dashboard

VW Up! dashboard

The first thing that must be considered is that UK sales figures were not included in the analysis as there is only data for 10 best selling cars. The lack of UK results affects considerably Fiat 500 as it was the tenth best selling car in that country during May/12 with 2.823 units. So the countries to be analyzed were the same of April’s analysis: Austria, Czech Reublic, Denmark, Germany, Spain, France, Greece, Italy, Ireland, Netherlands, Poland, Romania, Slovakia, Slovenia, Sweden and Switzerland, or in other words, those European markets with available data. In May/12 the trio Up!/Citigo/Mii sold more than Fiat 500! it is the first time the small VW have better results than the popular 500. The Germans sold 11.935 units, up 44%, against 10.818 Fiat 500, up 23%. Unlike what one would think, the difference is explained by what happened in smallest markets because both models sold pretty much the same in their native countries: 6.000 units in Germany and in Italy, and vice versa, 1.224 units of VW sold in Italy and 1.572 of 500 sold in Germany. In France they both sold more or less the same, around 1.050 units. But the big differences come from Netherlands and Denmark where the VW Up! has become really popular. In the rest of small markets people are shifting from Fiat to VW. But the analysis must be also done taking into account Fiat Panda figures.

The Fiat 500 has to compete with not only one member of VW family but 3: the VW Up! 3d, Seat Mii 3d, and Skoda Citigo 3d

The third generation is doing quite well in Europe. Although it has not reached yet its predecessor sales numbers, the small Fiat continues to increase the number of units delivered. In May 18.546 Pandas were sold in these countries, up 11%, less than its brother and Germans competitors, but is still the absolute leader of the segment (it was Europe’s 9th best selling car). Of course it depends a lot on Italian market, where it sold 69% of the total, but the new car had interesting numbers in the Netherlands (beating the German trio), and Germany. Anyway in Panda’s figures there are included both, the previous and new generation. It had some problems in Austria, Denmark and Spain, but its registrations in Italy rised 19% compared to April figures. Both Fiat results indicate that the brand is still the leader of the segment as they sold 2.5 more times than the 3 VW. And that’s the point to be considered. It is true the Germans passed Fiat 500 sales by more than 1000 units, but it is also true that in that comparison there are included 3 ‘different’ models (Up!, Citigo and Mii) against just one, the Fiat 500. It is also true that though the German trio sold more than Fiat 500, in the first case there are included two body types, the 3 and 5 door versions, while the Fiat 500 is only available in 3 door version. At the same time the comparison does not take into account that Germans are in their first months of commercial life, while the 500 is on its 5th year. And in the case of the Panda, the same problem of body type could apply. It is also relevant that Italy represents a big part of Europe’s A-segment car sales, and it is now facing really tough times.  In terms of costs is very important to mention that the 500 and Up!/Mii/Citigo are all made in low labor costs countries (Poland and Slovakia) while the latest Panda is made in Italy, where labor cost is higher. And finally one important thing to consider is that Fiat may be the leader of A-Segment but is now competing with the big power and excellent marketing of Europe’s largest car maker.

Fiat Panda offers much more habitability than its German competitors as it is conceived as a small utility vehicle and not as a regular A-segment car.

Year-to-date results show that Fiat Panda reigns and accumulates sales equivalent to the sum of Fiat 500 and VW Up!, Skoda Citigo and Seat Mii. The German trio is still behind Fiat 500 by 11.000 units as it had a very bad begining. But things seem to change and they finally begin to be a threat to Fiat 500 leadership, unlike what happened during April 2012. The VWs reigns in Germany but with very far sales numbers from what is seen in Italy with Panda. And also in the land of Skoda Citigo, Czech Republic; in Denmark where the VW Up! could become the country’s best selling car. Also in Slovenia, Slovakia (the country where they are produced) and Sweden. On the other hand both Italians are extremely popular in Italy, France, and somehow in Germany and the Netherlands. No matter what the reason is for this change in A-segment market, it is clear that Fiat must do something to maintain the sales of its beauty 500 or maybe accelerate a big facelift, well they can not loose market share in the only segment where they feel secure.

Sales figures for Fiat 500 and Panda, and VW Up!, Skoda Citigo and Seat Mii. Source: bestsellingcarsblog.net

 

 

Click here to see Fiat Panda/500 vs. VW Up! June 2012

Click here to see Fiat Panda/500 vs. VW Up! April 2012

by - 1 Comment

What if there was an Alfa Romeo citycar?

Alfa Romeo Sparo. Render by Jung-Kyu Park and Rahul Sadwelkar. All Rights reserved.

It does not sound usual the idea of a mini Alfa. This Italian brand has been always associated to sportiness, performance and premium cars, and therefore a small citycar with Biscione logo does not fulfil quite well those values. Nevertheless I would like to share with you a project I made with some colleagues in which we explore the posibility of launching an A-Segment car for Alfa, and analyse the way they could do it always keeping in mind the brand’s main values and image. At the end it was just an academic exercise to understand some Marketing basics, but the research showed us interesting things about the segment, the brand and what users of this kind of cars think their car should be. As the presentation is in Italian I will make a quick overview of it here for non Italian speakers.

Alfa Romeo’s current range. Just 2 models

First of all we analyzed the situation of Alfa Romeo as a brand, ant the future of it. We took some information from the teacher, who works in Fiat Auto in Turin, and there we had access to some statistics about future sales of the segment and general market. The outlook to the brand showed us the bad situation it is facing now with only 2 models available, and sales figures dropping considerably i both, Europe and Italy. But we found also that the brand has a strong image among buyers and a very good awareness. People can identify an Alfa, something that is really good especially now when all cars are becoming similar. Besides its history is perhaps one of most interesting ones among car makers. Those good aspects could work very well in its expansion plan in the US and China markets, and could be the base for positionating the brand as the unique Italian touch brand for premium sporty sedans. In the other hand there are Alfa’s known problems: quality problems in the past, no hybrid engines, no trully sporty cars and just 2 models available. While competition from Germany and Korea is getting really strong everywhere.

Current A-Segment offer in Europe

Then, after looking at Alfa’s range with its Giulietta and MiTo’s versions, we made an outlook to A-Segment in Europe. In terms of characteristics of the car is more or less the same for the rest of markets. The segment has positively evolved to keep a total market share around 9% thanks to more offer (in the last 10 years the options available in the market doubled) and due to higher gasoline prices. Of course Fiat is the absolute king of the segment with its Panda and 500. And when it is about the future of the segment there are certainly some things to clarify. First of all the tables showed in the presentation are based in a specific file given by the professor for the exercise. But as it is evident, those numbers are  excessively positive as they consider the crisis would be finish in the coming months and for the next 10 years both, total European car and A-Segment sales would grow up. Maybe the segment could have an even larger share but I personaly think the bad situation of today will last for at least 2 more years and the sales figures we saw 5 years ago won’t be seen in a while.

Alfa Romeo ‘Sparo’. Sketch by Jung-Kyu Park. All rights reserved

After that we began to describe the type of client for our Alfa after taking into account more information given by the teacher about customers description for each A-Segment car offered in 2007. Their economic situation, age, social life and they interaction with their cars was a key information for us to visualize the type of client we could find. And we found it. Unlike most of Marketing analysis in which they target young people, we found a possible kind of consumer between 50-60 years old, already retired that is looking for emotions in a car just to move in the city. This person would have a second and larger car driven by his spouse and he would like to have a small car only for him, no kids and with the advantage of being compact enough to go wherever in the city and feel high performance sensations with the latest technology. If we see what the market offers now we could only find the Smart fortwo Brabus and Abarth 500 starting at 18.000 euro. But the Smart is really small and not fun to drive, while the Abarth is more for young people to go on the road as in a circuit. There is no other small car to offer dynamic drive, good performance and luxury at the same time, with a strong personality. And that’s where we think there might be an opportunity for Alfa.

Alfa Romeo Sparo’s interior. Render by Alberto Roncalli. All rights reserved.

Therefore we developed the ‘Sparo’. A 2 seats, 3.3 m long citycar with a strong personality and a  large variety of efficient hybrid engines. Alfa could make use of Fiat’s latest technologies with small TwinAir engines and mix them with electric ones to create the first Hybrid Italian car, especially now when Italian government said they will help low emissions cars with less taxes. We arrived to some design shapes to see how the car would look (strongly based on MiTo) with a very unique interior (to repeat the success of Fiat 500). All these characteristics should be the base to positionate the car as the unique trully sporty citycar that offers dynamic sensations, practicality and Alfa personality. It should be know as the car to ‘live the city’. But the car would not be cheaper than the MiTo, though it would be smaller. We think Alfa can’t offer a more basic option than MiTo as the brand is to be known as a premium one. In this vein, the ‘Sparo’ (which means gunshot in Italian for small, fast and efficient to arrive wherever we want) should be positionated between the MiTo and Giulietta starting at 16.000 euro for the basic version up to 23.000 euro for the best one. The high prices are due to local production (for image reasons the car could not be produced outside Italy), and hybrid engines. Eventhough the automotive crisis would affect its sales numbers we believe this kind of target is not really suffering a lot in these days as they have a medium-high income which is practically fixed (retirement). Of course, as the target is really especific, Alfa could reach it through BTL ad such as social networks or blogs, that are highly used by this people as they have a lot of free time and they want always to be updated about the latest trends and technologies.

Alfa Romeo ‘Sparo’. Sketch by Jung-Kyu Park. All rights reserved

Although we concluded there was an opportunity for Alfa only if they focused on that kind of client and positionate the car as said before, I personally think Alfa Romeo should first develop its larger model range (D and E segment besides sporty cars) and then focus on a car like the ‘Sparo’. They can not say they are a premium brand when they do not even offer a sedan. Actually I believe the MiTo should not exist as it affects negatively the image of a premium and sporty Alfa (especially the version with 70 and 78 hp). Audi has done it with the A1 but after positionating their larger models and telling the market they are really premium. But doing it in the opposite way would only create more confusion about Alfa’s real values. Below you can find the link to see the whole presentation (in Italian):

Marketing Auto. Progetto City car Alfa Romeo 2012

This exercise was made for Marketing Auto subject with my classmates: Jung-kyu Park, Alberto Roncalli and Rahul Sadwelkar.

by - 9 Comments

Europe: a new segment is born

The Fiat Linea MY 2013 is the best selling car in Turkey and is also produced in Brazil and India.

Europeans love hatchbacks for the starting segments: A, B and C. It has been a constant during the last 20 years when this kind of body has become the most popular in the continent. All car makers offer a hatchback, premium Germans included, and VW Golf 3/5 door hatchback has ruled for a long. But cars as other goods depend a lot on the way economy goes. The last 3 years have been difficult for European car market, and it seems it will last for other 3 or 4 more, and car makers are changing their future plans in order to maintain their positions in the market. Part of this strategy is to understand consumer’s behavior  in a difficult period like this, and offer the right product for the right time. Western Europeans are now looking for sedans in these segments, something that was not even considered by a lot of carmakers as their offer was limited by hatchbacks body. The crisis might had an effect on what some Europeans are looking for in a car as their income has decreased, and their future is quite well uncertain. Now they want less prices and more roomminess and only a sedan can offer it.

The turkish Linea is sold in some Western European countries but has not been successful at all. The car is 4.44 m long

Therefore the segment of B and C segment sedans could be arriving to West Europe because of the latest announces of important car makers such as PSA and VW. This segment is more known in emerging countries where most of buyers look for a small-medium cheap sedan with independent trunk. Fiat Linea or Siena/Albea, or VW Voyage, Suzuki D-Zire and some others have been offered in Brazil, Turkey, India and some other important markets but never in Europe. This week, though, VW showed the first images of their new B/C-segment sedans: the Skoda Rapid and Seat Toledo, while PSA did the same with their 301 and C-Elysée. In fact is not easy to positionate them in a specific segment, as their measures are long but their prices won’t be high: the Rapid should be located between the B-segment Fabia and C-segment Octavia, while the new Toledo would be between the Ibiza and Leon. Peugeot has said that its 301 will be the cheap version of 308, which is C-segment, but in reality it looks more like a 208 sedan. Anyway, these 2 Europeans car makers realized that people may be wanting other kind of car in this period. It is why this new sub-segment may be rising only in Western Europe, though the big part of sales is abroad.

Fiat Linea interior based on Fiat Punto MY 2013

Fiat, a strong player in low segments lacks of an interesting sedan. In some European markets, like Spain and Greece they already offer the Linea, the sedan version of Punto produced in Turkey, where it is the best selling car. But sales numbers of this large sedan (4.44 m) has not been good in the rest of the continent. The car is really cheap and big inside, with an enormous trunk but very small engines and poor quality. The car is not even offered in Italy as people don’t like it, but what if Germans and French are successful with their new small sedans? Fiat should repositionate this model and offer it with better engines and quality and at the same time make useful the advantage of producing it in a country with lower labor costs than Western Europe. The car could have interesting numbers if they change the way the sell it and offer a medium sedan with great roominess, and add the latest engines Fiat has developed in Italy. Time will show how right were Germans and French by offering these new cars and how wrong was Fiat not making useful of this interesting sedan.

Fiat Grand Siena, launched in March/12 for Brazilian market. An enormous success