Fiat mulls low-cost brand, Marchionne says

[nruggiero]

Fiat mulls low-cost brand, Marchionne says
Automotive News
February 4, 2013
by Luca Ciferri

TURIN -- Fiat is considering launching a low-cost sub-brand to rival Renault's Dacia, CEO Sergio Marchionne said. If approved, cars for the brand would be built outside of Europe to reduce manufacturing costs.

"We are wondering if there is space for a low-cost brand such as Dacia in the Fiat world," Marchionne said on Sunday in an interview at the Carignano theater in Turin.

Fiat has plenty of spare capacity at its Italian plants but Marchionne said the automaker could not make a profit building a car in its home market that would sell in Europe for 7,450 euros ($10,100). He said Fiat is currently analyzing its manufacturing capacity outside of Europe to see if a low-cost brand is viable.

Full article at link.

[Canuck]

Plymouth in Europe?

[PHAT-JAY]

how many more ****ing brands is that idiot Sergio going to develop...

[bmwboy2007]

Here we go again.. Cheaper than a FIAT? What would that look like?

[GMCHINA]

I think that we've reached the point where Marchionne is out of his depth. He's done a great job getting us this far. I think that the company needs a more seasoned marketing person to lead it forward. There is no need fr nay auto company to have more than 3 brands, maybe 4. The only company successfully doing it today is VW. Fiat is well behind them in terms of establishing his brands. He needs to focus on Chrysler /Fiat, Jeep/ALFA, RAM, Maserati. No need for Dodge, lancia or anything else. That's it. Low, mid, high. If they get around to it, they can use Dodge as the low cost brand in developing markets.

[chinamonty]

What exactly is the problem with having a high value and low value model with the same brand?

[GMCHINA]

I don't see why they need Chrysler dodge and FIAT in US? They all target a similar market. They should sell either Chryslers or FIAT, not both. Maybe a niche product like the 500 here and there, but I don't see how he his going to successfully do all three with a full line up or why you would want to do it that way? They are going to waste marketing Resouces chasing the same group?

[KingElvis]

Fiat is not a low cost brand? Have you ever seen the original 500 - the 'real' 500 from the sixties? That thing makes a VW Beetle look like a Cadillac.

[Bravada]

What exactly is the problem with having a high value and low value model with the same brand?

Go and get yourself a Dacia Quattroporte

[Novak454]

1. Isn't Fiat as cheap as you can get?
2. Watch - if it happens, another step of production out of Italy.... how long before headquarters are moved to Auburn Hills?

[GMCHINA]

They already have too many brands. No need for more. The trend is less brands, not more. Only vW has successfully executed a Multi brand strategy recently. We'll see he long that lasts.

[KingElvis]

I think that we've reached the point where Marchionne is out of his depth. He's done a great job getting us this far. I think that the company needs a more seasoned marketing person to lead it forward. There is no need fr nay auto company to have more than 3 brands, maybe 4. The only company successfully doing it today is VW. Fiat is well behind them in terms of establishing his brands. He needs to focus on Chrysler /Fiat, Jeep/ALFA, RAM, Maserati. No need for Dodge, lancia or anything else. That's it. Low, mid, high. If they get around to it, they can use Dodge as the low cost brand in developing markets.

Dodge is ten times the car that a Fiat is - at least in the US. And Maserati has been a failure in the US. Nobody thinks its really exotic like Ferrari. Killing Dodge - which is far more popular in sales than Chrysler - would be stupid. Not to say Marchionne is not considering it. Creating SRT as a 'division' is exceedingly stupid but it appears they are doing that to strip Dodge of cool and expensive models. People just got accustome to thinking of Dodge as a big and muscular car again - and now Marichinocherry is trying to - no he's not trying - he's actually sabotaging a successful brand in order to push a moribund brand of Chrysler or create a 'brand' out of thin air in the SRT.

[Bravada]

First off, really, a brand is not just something a car business has to have a fixed number of, depending on a current trend in business. A brand is something that adds value to a car by defining its identity and highlighting and augmenting some of its characteristics, or adding some extra allure to it. E.g. "Porsche" put on an SUV makes it appear sporty, upmarket and exclusive.

The problem with having a multi-brand portfolio is giving each brand an indentity. This way, even regular products can gain extra value and either attract a loyal following who wouldn't buy any other car despite other characteristics (and however deep many profess they are not susceptible to that, experience proves we all are), or simply help make the same product sell at higher price points.

Many "brand stretching" monobrand retailers face a limitation to their pricing and/or market outreach powers. There is nothing really exciting about owning a Toyota, Ford, Hyundai or VW. Even a rather "special" model doesn't feel all that special if its badge can be found on pretty much anything else.

The problem with Fiat is that while they have some of the most powerful brand portfolios around, they seem at a loss trying to define their brands. How is Dodge exactly different from Chrysler or, for that matter, Hyundai, Toyota or Ford? Does anything really bind Lancia products together apart from the dealership floor? Is the Durango still a Dodge or more of a Ram? What makes the Compass a Jeep more than a Dodge? What does the Freemont have in common with the 500?

I do believe low-cost brands do make sense if done right. A properly-done low-cost car is so different from other modern cars it should be kept at arm's lenght to keep both brands' messages clear. But indeed, in many markets Fiat is already in, or close to, that market segment, and even started the whole low-cost-car thing with the whole Uno, and later Palio, derivatives family.

Presently, Sergio seems to try to reposition Fiat to some awkward place using the 500 and 500L, while trying to cover all the traditional bases and more with a product portfolio stretched from the Panda/Uno to the Freemont, with a plethora of market-specific models in between. What Fiat could use first is a good definition of all of the brands in their portfolio, then adjusting the product planning to fit, fulfill and build upon each brand's message, and then look for gaps to fill.

[ausrutherford]

I guess Innocenti it is.

He could bring over the new Palio/Siena and the new Uno from Brazil for low cost cars.

[Z284ever]

Hey, hey, hey.....

Let's not be so hard on Sergio. The man deserves some encouragement. I've aways loved Plymouth. Growing up, they were the coolest Mopars - by far.

Sergio my man, don't listen to the negativity. Draw up your proposals for a 'Cuda, Duster and Road Runner and get back to me.