Fiat and Ferrari, a weird relationship

Fiat and FerrariThere are several types of marriages and partnerships. In automotive world it’s common to hear about merges, acquisitions and divorces among car makers that look to survive. There are strong ties such as Peugeot and Citroen, VW and Audi, Fiat and Alfa Romeo/Lancia, Chevrolet and Cadillac, Hyundai and Kia, and so on. There are other with more difficulties, like GM and Opel, or VW and Seat/Suzuki. But perhaps there’s only one with the most weird situation: Fiat and Ferrari. Few people know that the fantastic super car manufacturer makes part of Fiat, and there are many reasons that explain this. First of all, Fiat’s automotive division is divided into two mainly parts: Fiat Group Automobiles, which includes Fiat brand, Fiat Professional, Lancia, Alfa Romeo, Abarth, Jeep, and Mopar. And Luxury and Performance brands that include Ferrari and Maserati. This is the way the group works now, but it will change as soon as Fiat buys the remaining part of Chrysler (latest news indicate that Fiat may switch from the Milan exchange to NY one’s once the purchase operation is completed).

Fiat Auto in EuropeThe division between Fiat and Ferrari includes different legal societies, events, management, marketing, and finance (their results make part of the same report but their operations and details are separated). That’s how Fiat headquarters in Turin are not involved in Ferrari’s day-to-day activities. There are a lot of reasons for this split (economic and politic), but, in my opinion, it doesn’t seem to be the best thing. Ferrari is maybe the world’s best-known car brand with the highest number of fans (more than 11 million in Facebook). It is the referent of sporty and high performance cars, and is one of the brands to lead in technology field. This amazing car brand is also an example of how to do the best marketing. Unfortunately these good aspects of Ferrari don’t make part of the other brands of the group. It seems like Ferrari lives in its own territory away from the troubled FGA. The situation between Ferrari and Fiat is like the son that became rich and doesn’t want to know anything from its poor and complicated family. It’s quite understandable Ferrari’s position as it wants to protect its image staying distant from the mess in FGA (problems with sales registrations, bad quality of some of its cars, management problems). Part of the success of Ferrari is not only the cars they produce, but the brilliant way the sell and promote them. Part of the problem of Fiat is the bad image it has among many buyers.

Photo by: madwhips.com

Photo by: madwhips.com

But I think this weird relationship must change. It makes no sense to have one brand suffering because of image, and another one making use of it. Ferrari gained its good reputation thanks to hard work and excellent cars. Then it should help its troubled brothers so they can make use of its experience and improve their position in the market. Yes, it is not possible to place Fiat brand/Lancia/Fiat Professional and Ferrari in the same place. They are completely different brands with different targets. But Ferrari’s know how could be an extremely valuable asset for them. There should be more cooperation between them and just as it happens with Ferrari and Maserati (they share some engines and technologies), the same should happen with Alfa Romeo and Abarth. Besides this collaboration, which may not be the best thing for Ferrari, Fiat Group should work more on associating Ferrari’s name with the other brands. I mean, people should realize that the group that makes the awesome Ferraris is the same one that builds the popular Fiat 500. It means that the group should focus on more communication efforts to outline that they are all Italians and they can do the best high performance cars, but also the best city cars. Is like VW and its brands. Most people know that Audi, Porsche, Seat and Skoda share components, technologies and platforms but it doesn’t mean that the image of each one of them is negatively affected.