Geneva Fallout 2018 – The Things Bosses Say

Fiat didn’t hold an official “Exhibitors Conference” on the first media day at this year’s Geneva Salon, but that didn’t prevent FCA’s CEO pronouncing on the future of Fiat’s European activities.

Source: R Parazitas

Sergio Marchionne declared that “for the 500, 500X and Panda it is worth pursuing, I am less in love with the Tipo, despite its sales success. We have to be careful how we distribute large amounts of capital. The Tipo is less encouraged, because that sector of the market is very crowded and not very profitable. It was a part of the market where Fiat traditionally was, but maybe we need to move forward”.

Source: Fiat Auto

Eccentric shooting from the hip, or a clear vision for Fiat’s future?

Sergio may have a point.  The Turkish-built Tipo is more in the spirit of Dacia than of Škoda, cobbled together from the hard-worked Corsa/Punto SCCS/Small platform, and a selection of less than cutting-edge Fiat powertrains. Its development costs were probably around what VAG are spending on the Golf Mk.8’s tailgate.

The product itself is cheap to buy, dynamically just about competent, well kitted, but somewhat behind the field on Euro NCAP scores; three stars in standard form, four stars if the ‘Safety Pack’ is specified.

Previous Fiat C-segment contenders have enjoyed the unequivocal support of the company’s management but, in this century at least, have been a constant disappointment in the tedious and vulgar matter of sales numbers.

There’s a clause in the Fiat Charter which says that the sales projections in this sector have to be set astronomically high, in the expectation that every potential customer will realise they would be a bloody fool to favour the Golf, Focus, or Astra over the new Bravareo, Stilo, or Bravo Redux.

It’s said that the Stilo was tooled for 450,000 cars a year. In its best year, 2002, 175,626 were sold in the EU/EFTA area. By 2016, its last full year, the number was 50,382. The Type 198 Bravo was even worse. It peaked at 93,371 in 2008, dwindling to 16,550 in 2012.

(There is another clause in the Fiat Charter that the popularity of every promising newcomer will wither and die around the middle of a normal sales cycle. The indefatigable 500 has defied the rules by posting 189,360 EU/EFTA sales in 2017, its best ever performance. It must be these tail-lights…)

Source: Fiat Auto

By comparison, the technically and conceptually unambitious Tipo (Type 356/7/8) has been storming the ramparts with 123,767 EU/EFTA sales in 2017, to which should be added over 40,000 registrations in Turkey. Can Marchionne sacrifice these numbers in the cause of brand identity?

Sergio’s championing of the 500, 500X and Panda suggests a MINI-like future for Fiat in Europe, but how long can a brand survive on the blessed memory of a late ‘50s small car? Could the Panda design vocabulary be re-scaled into a convincing C-segment SUV – a Panda Gigante perhaps?

The Panda’s star has fallen somewhat since the brilliant Fiat Charter-defying Type 169, which peaked at nearly 300,000 sales in Europe in its second last year of full-scale production. The succeeding Type 319 has managed around 190,000 in each of the last two years.

There’s talk of moving Panda production to Tychy, on the specious notion that Stabilimento Giambattista Vico (as we must now call the former Alfasud production facility) would be put to better use making Alfas – Sergio has decreed that all of these have to be Italian-built.

If it comes to pass, Italy’s three best selling cars could come from Silesia, and possibly the fourth from Anatolia. For the broad mass of consumers even in Fiat’s home market, state of origin matters far less than it does to Sergio. Making the Panda beside the 500 and White Hen in Tychy makes eminent sense, more so as the new Firefly engine is to be produced in nearby Bielsko-Biała. Alfa are welcome to have the Neapolitan Linwood back.

Is there a plan behind all of this or is it just chaos dictated by expediency?  And is there room for a Lancia revival somewhere along Fiat Europe’s new road? With the CEO’s capriciousness nothing can be ruled out.

10 thoughts on “Geneva Fallout 2018 – The Things Bosses Say”

  1. Marchionne is tallking nonsense as usual; Dacia has one of the best profit margins in the business as you said yourself in your last article Robert. Fiat simply will not survive as a mass producer of cars on current form and without a massive capital injection. Where are the hybrids, electric cars? Where are the cars with front suspension that won’t go wonky at the first encounter with a speed bump, climate control that comes within a few degrees of that which is set, components that won’t dissolve the first time you park next to the sea and dealers who don’t view you as an annoyance who should be squeezed for cash while having as much of your time wasted as possible?

  2. Marchionne’s pronouncements have something of the current occupant of the White House’s stream of consciousness, almost Tourette’s immediacy about them. No real consideration or judgement as to the likely impact, simply whatever has kidnapped his synapses at that specific moment.

    Perhaps it doesn’t matter. Likely Tipo customers probably don’t pay much attention to what FCA’s self-styled maverick CEO does, says or indeed wears, but why talk down a Fiat-badged success, given how hard-won such things are these days?

    In my view the Panda is the most credible car Fiat currently makes, even if it has been eclipsed by the evergreen 500. A super-size Panda has appeal and perhaps, even some credibility. Making practical, well designed and enjoyable cars like this has always been Fiat’s speciality and one to be encouraged of course, but making money out of them is a matter the Italo-Canadian magician has yet to pull from his jumper.

    1. I agree with the Panda’s credibility. I don’t even think it actually has to be made bigger, as in its 4×4 guise it’s already the perfect micro-SUV. The last two generations have lost a bit of the ruggedness and simplicity of the first Panda which made it a perfect choice for everyone who had to do business on small mountain roads. The Swiss Post had (and still has, I guess) lots of them. But nevertheless, also the newer ones are still selling well and helped make Fiat the Nr. 7 or 8 in 2017 sales for the alpine canton I live in.

    2. Speaking of matters sartorial: Is John Elkann paying tribute to Germany’s famed former foreign secretary, Hans-Dietrich Genscher with that cardigan?

      Back to matters automotive: Marchionne hasn’t got a clue when it comes to tangible product.

    3. Kris: if Cantarella wasn’t good enough at the business side, he trumps Marchionne for product understanding. SM doesn’t understand car buyers or cars themselves. He’s like those clueless accountants who ran GM, Chrysler and Ford in the 80s.

    4. I think we’d have to go back to Vittorio Ghidella to find a Fiat CEO who really knew his onions. Once he came out worst of the late-’80s power struggles in Turin, it all started to go downhill. Gianni Agnelli ought to bear some of the blame for this state of affairs – he should have ensured the right people remained in the driving seat, rather than allow the sort of power play that habitually occurred take place.

      Marchionne either doesn’t know whether a product is good enough or simply dismisses such considerations as immaterial. I find it difficult to imagine that posterity will judge his achievements all that positively.

  3. Another piece of number juggling, which possibly proves nothing.

    Combine the 2017 EU+EFTA sales of the Tipo with those of the 500X which uses a slightly shorter version of the same platform and you reach a total of 213,816.

    In the same markets the Ford Focus managed 212,253 sales, and the Astra just bettered the Fiat duo at 216,515.

    I’m not quite sure what the 500X is for. It’s a bit too big to be a Punto replacement, rather too small to be comfortable in the heart of the C segment. I can’t take it seriously as an SUV, although 4WD is available. It’s so off-beat it has to be likeable. Sales seem to be conforming with The Fiat Charter, by dropping around 15% per year.

    1. I’m not sure what numbers ever really prove, but they certainly make some pretty impertinent suggestions. By your reckonings Robertas, one could also factor in European sales for the shared platform Jeep Renegade, (both of which are built at Fiat’s Melfi plant) which amounted to 72,578 last year. (Carsalesbase) With those folded into the mix, the FCA trio comfortably outperform both Ford and Opel. Puts a slightly different complexion on matters does it not? One wonders however, which of these manufacturers (if indeed any) are making meaningful money on any of these model lines?

      Surely a Qashqai rival would potentially offer more profit per unit though?

  4. Hmm. You cannot give away the Fiat 500 in Canada – sales amounted to 10 (ten) in February 2018. The Americans went wild and bought 416. Here’s some comment on this completely over-the-hill model, and its equally useless 500L and 500X stablemates:

    The Jeep Renegade sells pretty well in the US, about 100,000 per year. In Canada, they sold 108 in February. The ridiculous looking 500X managed 1, yes, that’s ONE unit in February.

    Canadians are far more savvy than Americans when it comes to smaller cars. In percentage terms far more are sold, and manual gearboxes are not unusual – we are not as rich as the US. Nissan doesn’t even sell the Micra in the US. And we recognize rubbish when we see it, which sums up the lack of response to all these shoddy Fiats.

    Purchase at your own risk is the message from here. The total vehicle market here is 2 million per annum, so Fiat is utterly irrelevant. Marchionne can flap his gums as much as he wants – you cannot flog second-rate uncompetitive goods on an ongoing basis to pragmatic people who experience real winters.

    1. Is the utter failure of the small Fiats in the US equivalent to the utter failure of Cadillac in Europe? If the Europeans rejected the N. Americanism of the Caddilacs, the N. American returns the favour and rejects the ultra-European character of the Fiats. Ten sales in a country with a more European flavour than the US is quite some indictment. Selling those cars lost them money, lots of it. Selling ten was worse than selling none at all.
      Thank you for that insight on the Canadian market. I would not have imagined it to be much different than the north of the US. But it is, which I am glad I now know.

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