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Fiat needs more than the 500 to revive core brand
Agnieszka Flak
October 5, 2014
PARIS (Reuters) -- While rivals rolled out new models and concept cars, Fiat had little to display at the Paris auto show besides the 500X in what is starting to look like a worrying trend for the carmaker's namesake brand.
Following the full takeover of U.S. unit Chrysler, the newly-named Fiat Chrysler Automobiles (FCA) has set out an ambitious growth plan focused on its upmarket Alfa Romeo, Maserati and Jeep brands.
Analysts say it makes sense to concentrate on higher-margin premium vehicles that are selling strongly in the United States and emerging markets, but are concerned the group is neglecting a Fiat brand which still accounts for a large chunk of sales.
FCA sold 1.5 million Fiats last year, with deliveries of the mass-market brand accounting for 34 percent of the group total.
Agnieszka Flak
October 5, 2014
PARIS (Reuters) -- While rivals rolled out new models and concept cars, Fiat had little to display at the Paris auto show besides the 500X in what is starting to look like a worrying trend for the carmaker's namesake brand.
Following the full takeover of U.S. unit Chrysler, the newly-named Fiat Chrysler Automobiles (FCA) has set out an ambitious growth plan focused on its upmarket Alfa Romeo, Maserati and Jeep brands.
Analysts say it makes sense to concentrate on higher-margin premium vehicles that are selling strongly in the United States and emerging markets, but are concerned the group is neglecting a Fiat brand which still accounts for a large chunk of sales.
FCA sold 1.5 million Fiats last year, with deliveries of the mass-market brand accounting for 34 percent of the group total.
"The 500 is getting older and older, the success of its variants has been limited and they lack a competitive offering at a time when Volkswagen, Peugeot and Renault continue to launch new cars," said Sascha Gommel, an analyst at Commerzbank. "Even if the European recovery was gaining momentum, Fiat would definitely lose out."
"Mini did the classic rollout of keeping sales steady over the years by slowly and steadily introducing product variations, but Fiat is not that disciplined," said Jane Nakagawa, managing director at Portia Consulting. "To the average consumer, the variations they have come out with were relatively invisible."
CONTINUE AT AUTONEWS.COMFCA said during its strategy announcement it recognized the need to purify the DNA of the Fiat brand, and that it would develop products that are either "functional" or "aspirational."
It also said it would leverage the 500 family to expand in the upper segment of the mainstream market.
"That entire brand has lots of magic sprinkled on their product," said Portia's Nakagawa, referring to the 500’s past successes and the new Panda, which has been selling well. "But they also need to make some hard choices about which models fit the idea of functional or aspirational, and which need to go."