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

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.

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 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

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 and

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 and

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.

Lancia Ypsilon surprises in troubled Greek market

For the second month in a row, the Lancia Ypsilon got very interesting results in Greece. Although this market is facing difficult times because of the deep Greek economic crisis, and therefore car sales figures are extremely low, Lancia has managed to place its B-Segment hatchback within the top 10 during April and in 14th place during May. It is practically the only market after Italy where demand of Ypsilon places it among the best selling cars. In fact in April 2012 the Lancia sold 92 units, 2.1% of the market, the same quantity of Fiat Puntos, and for the first time, above the results of popular VW Polo. One month later the Ypsilon is not in the top 10 anymore but still enjoys of a healthy 14th place with 97 units delivered, 1.8% of market share, 11 units more than Fiat Punto! YTD figures indicate the Ypsilon occupies place #21 with 344 units sold, much much more than the 130 delivered during the whole year 2011. Certainly the Ypsilon has arrived in the worst moment for Greek sales, but it seems people like the good mix of luxury interior and nice optionals in a compact 5 door package. Greek people are a bit snob when buying cars as for most of them having a Mercedes or BMW is the dream of their lifes no matter the economic conditions. Nevertheless the current crisis has shifted their idea of luxury as this premium brands are loosing market share, while small cars continue to increase their presence. Fiat-Chrysler group has been always popular in Greece thanks to small 500, Panda (the most popular among car rentals in all Greek islands), Punto and now the Ypsilon. Greek car market has dropped 41% in Jan-May/12 to 26.902 units and is expected to be the biggest fall among European markets this year. Fiat-Chrysler brands have fallen 39%, below total market’s thanks to great permormance of the Ypsilon: Fiat -46.5%, Alfa Romeo -46%, Lancia +348%, Jeep -72% and Abarth -48%.


Source: Best Selling Cars Blog and Association of Motor Vehicle Importers Representatives

What comes for Lancia/Chrysler

Graphic by

Graphic by

Two brands and two continents. That’s how they work together and will be even closer as future models arrive. At the beginning only Lancia got the mission to adapt Chrysler brand models to its European range of models. But in the coming years they will develop common models exclusively for their targets. Meanwhile the situation of them is becoming really different.

The 2011 Lancia Ypsilon, an instant hit in Italy and Greece but no where else

The 2011 Lancia Ypsilon, an instant hit in Italy and Greece but no where else

Lancia has been always the brand of championship’s success of Italians. They all remember the best years of this historical brand and some of them keep their old cars as a treasure. Unfortunatelly those good years are quite far from today as Lancia is trying to survive in a complex European context. First it was a problem of quality of its products (from early 90’s to mid 00’s) and then came the European crisis that has affected more those small brands without a distinctive image. Anyway the position of Lancia is now very complicated as it depends a lot on the Italian market: about 85% of total sales* come from Italy and it’s a brand with no presence outside Europe. This big concentration of sales in only one country has made of Lancia one of the most threatened brands of Fiat Group. In term of models the situation is less concentrated: the popular Ypsilon (launched in 2011) counts for 62% of its sales (90% of them are sold in Italy though), and then comes the beauty Delta with 18% (81% sold in Italy) and 17% for the Musa (93% of them sold in Italy). And according to recent data it seems the rebadged Lancia Thema (aka Chrysler 300) and Lancia Voyager (aka Chrysler Town & Country) have not gained a good position within their segments (especially the Thema). On the other hand, Lancia has lost its identity and Europeans do not recognize it as a major car brand.

Chrysler 200: 120% of sales growth in Jan-Apr/12 in USA. Photo by

Chrysler 200: 120% of sales growth in Jan-Apr/12 in USA. Photo by

In the other shore of the Atlantic ocean, Chrysler brand is now going through a rebirth after its death in 2009. When things went really bad, its market share was extremely small and its products were identified as low quality ones, Marchionne and his team began a tough work to redefine its position in the market and gain people’s trust. That’s how Chrysler is now one of the few car brands to have 10 months in a row of growth sales although it has not launched any all new model since many years ago. The restyling of 200 and 300 has been enough to get the attention from customers in the US and Canada, while the popular Town & Country minivan continues its success. Its presence is clearly concentrated in North America (Nafta market, 98%) but the name is also known in the UK, Japan and Brazil, and soon in China.

A Lancia render exercise. Graphic by

A Lancia render exercise. Graphic by

After taking into account the current position of both brands, it is clearly urgent to change some things about them. First, Lancia must acelerate its change image campaign in Europe in order to have better market share outside Italy. They have been doing pretty well in the first quarter of 2012, but there is still a long path to go. In terms of models, they should conceive future models as more global ones rather than Italian image. It is true that are really different style and original (especially the Delta) but this kind of design is not the one Europeans are looking for. Besides, the quality perception must be equal to its competitors in order to combat its terrible low quality image. And finally, they should work on repositioning brand’s mission which should be as stated: “to become Europe’s best mid-luxury C and D segment offer” that should complement Fiat’s model range as higher class mid size cars with a ‘unique’ Italian style.

The Chrysler 700C concept to anticipate possible future lines of the next Town & Country. Photo by

The Chrysler 700C concept to anticipate possible future lines of the next Town & Country. Photo by

Chrysler must replace as soon as possible its sedans as they are getting old and then it could keep its sales growth. The 200 and 300 can be working now but the competition is getting difficult as the total market keeps its recovery path. In terms of geographic position certainly the US market will continue to be its main arena, but it can gain some market share in other interesting markets such as China (they love large sedans), Russia (they love luxury cars), and the Middle East (they love big American cars). Therefore the model range should be complemented by larger sedans (E segment) with special versions for extreme luxury. Chrysler should become the best option when thinking of a C, D and E segment mid-luxury sedan in America, and ofcourse think of a great sucesor for the great Town & Country with several body type options.

*According to FGW data basis