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FIAT Aegea launched today...Thursay 21st May, 2015

Discussion in 'Fiat Global News' started by asimpleson, May 21, 2015.

  1. jackharrisw

    jackharrisw Amatore

    @prabhjot, As Raj_pol said, I tool feel a little disappointed that not even One FIAT car is available in the top 20 vehicles sold in Europe. I kind of feel, FIAT brand is being diluted by FCA, without any timely upgrade or proper planning both in India and other countries.

    Although you say, it is multi branded and unique, i'm not happy.

    I feel like FCA should give more importance to brand FIAT like they give for JEEP and introduce more models.

    Like to hear your comments on this.
    Masum Reza likes this.
  2. prabhjot

    prabhjot Esperto

    delhi ncr

    Marchionne's strategy since the global financial crisis of 2008/9, which he actually capitalised on by acquiring these great, pretty-big, and hoary American brands on the relatively cheap (Chrysler Dodge Jeep Ram), has been to devote all incremental investment to (a) funding the merger: obama govt-mandated high-cost debt, etc (b) investing in new plants, new models and esp HUGE marketing and branding in the American brands, since he felt that (c) europe was too high-cost/low or negative margin due to overcapacity and overcompetition, and (d) europe had a severe recession just as the us market boomed., plus (e) JEEP was the real high-potential brand right around the world, and so it got international-investments priority.

    He has been proven massively correct in all these judgment calls. As regards FIAT he deliberately and explicitly insisted on focussing only on the 500 sub-brand in order to boost brand-recall/allure ('premium within mass') in europe, while waiting out the recession in europe in order to then have the new low-cost-high-quality manufacturing setup ready in turkey for the real push to the now-shrunk FIAT model-portfolio: the 3 Aegea/Tipo models. To be followed in 2017 in europe by a FIAT 500XL twin of the Jeep C-suv, and a Punto-replacement too, plus a new FIAT Freemont/Dodge Journey in 2018?

    Meanwhile the same process has repeated in brazil: high profits for FCA suddenly collapsed because of the severe recession there, still underway indeed worsening, and yet FIAT is profitable there thanks in no small part to the high-margin 'premiumization' strategy currently underway there via the Jeep Renegade and the Fiat Toro, with FINALLY by 2017, replacements for the palio, punto, bravo, linea as well as grand sienna, and a new entry-level KWID-type tall cross-style hatch the x1h.

    i.e., He deliberately slowed-down investments in the fiat brand and new models etc BUT has been amping the brand backup for the last year (500X, facelifted 500, 124 spider, aegea) with lots more coming in europe and, more to our concern, brazil+argentina by 2017. i.e., it is just a matter of timing, synchronizing the firm's investments as per regional and global business cycles etc.

    However, it is true that Marchionne does not see much pent-up potential for mass-market Fiats in China or Asia-pac, for which then the focus is totally on Jeep, the ambitious new Alfa Romeo-s which will the world over retail with the Jeeps, and in China even one or 3 Chrysler american models. The Fiat Viaggio and Ottimo have not been successes in the very hyper competitive Chinese mass market, while Jeep has been, is and will be even more as local manufacture of Jeeps has just begun there, with another plant opening for Jeep in 2016 in south china.

    Where that leaves India for the FIAT brand is the question. There will be a host of all-new models available by 2017 (from the new brazilian xih and palio-replacement to the 500X via the aegea sedan) in the global portfolio.

    That is a function of how, like me, pessimistic they are about their Indian prospects, and of how they are able to integrate (like Ford and Renault-Nissan in India) their new India models into their global export plans.

    Let's see. Another, new, issue they have to face, increasingly, will be reduced demand for the mjd-s and even a potential threat to the new 2lite mjd they'll be making for Jeep and for Tata, what with low petrol prices and the new emissions and pollution abatement concerns just begun (countrywide) in Delhi ncr.

    We'll know soon: in Jan.

    I'd urge them to use India as an r&d and export centre for the following twin models: a 'new Avventura' to go up even in parts of Europe against the econo-cuv-s like the ecosport and the duster (much cheaper than the 500X) twinned to a near-identical-under-the-skin Jeep for emerging markets-only, off the new, lightened Palio platform. Then, if Indian made new punto-s can be exported even in lhd to europe as an entry-level, low cost hatch.....? These decisions depend on financial questions mainly, i guess, of the choice of 'platform' and 'architectures', not to mention export-demand for indian-made Fiats, as also further collaboration with tata and/or maruti that are impossible to judge from the outside.

    The all-new models will be available for deployment in india, several potential ones. Financial cost/risk-reward judgments will decide which ones we get, and when, considering also that the main focus over the next 2 years will very much be on JEEP, in india and for exports.

    We keep forgetting how the Indian market has stymied so many firms, including the mighty toyota and vw too, let alone chevy or tata. The first 3 of these will not be any more energetic or faster than FIATwill be: barely anything before 2017, mainly 2018 really, from them. The Indian market looks huge and appetizing from afar, but in fact is quagmire for all non-dominant (non-ms+hy+mahindra) firms, and has moreover barely grown, net net, over the last 2-4 years, nor will it pickup much speed going forward imo.
    jackharrisw likes this.
  3. jackharrisw

    jackharrisw Amatore

    Thanks for your elaborate details and insight. It's so informative.
    Now, let me put some insight/point of view on this.

    No FIAT cars at top 20, gives an impression to general people that FIAT cars are
    (not that good/not that successful/just ordinary/not that reliable) feel, and it takes away the brand's visibility and it gives negative perception to the brand.

    If some cars from a brand appear in this kind of list, it itself is an advertisement for that brand/car in it's own way, and here FIAT as a brand is far far behind i feel.

    I am a regular viewer of Discovery TURBO channel. And even there, seeing a mention of FIAT is far less when compared with the likes of Ford/VW/GM/Honda/Toyota.
    I feel like there is some disconnect between brand FIAT and people(Either marketing or strategy wise).

    Also, FIAT just being a brand for small cars is not a good strategy i feel. They definitely need a car that could compete with the likes of Jetta/Civic/Octavia/corolla. I know Viaggio exists, but either it's not given it's due importance and it's only limited to few countries. Most people don't even know that such a car exists. Definitely a SUV/sedan in 'D' segment is always a must to ensure 'premium within mass' image.
    A brand with 100 year's of heritage and having no 'D' segment sedan/SUV is not a good idea I feel.
    Here, I am speaking on a global perspective, as we all know that, D segment is just about non-existent in India.
    asimpleson and prabhjot like this.
  4. prabhjot

    prabhjot Esperto

    delhi ncr
    Well yes, thanks to the internet and google search and youtube plus multiplex cable tv the sphere of automotive information and 'culture' is globalized but markets, marketing and branding are still quite national or at best regional. And so yes people, for eg in india, have the impression that Hyundai is a great successful firm with so many models selling in every country of the world etc, and that benefits their brand image here in india, even though they remain a discount brand everywhere, with little to no distinction/originality/identity of either technology, engineering or design: the LG or maybe Samsung of cars, at best. Korea is a miniscule market. And so Hyundai-Kia, like the Japanese before them, cannot rely on any great numbers in their core markets: they are almost entirely 'export'-oriented, have been from the outset, in a sense pioneering the radical 'globalization' of thecar industry.

    As opposed to the old, heritage+pioneering firms like Fiat or Jeep or Renault or Peugeot or General Motors etc which STILL have very strong geographical core-markets, with distinctive identities and concomitant loyalties.

    Both approaches have their strengths and weaknesses. FCA has chosen or has had to adopt a radically multibrand approach, the polar opposite of the 'universal' brands like Ford, Toyota, Nissan, Hyundai etc.

    But that is because FCA actually can afford to since it has several large, profitable, strong 'core', quite loyal and sticky, markets and regions and segments, and of course brands: Brazil/LatAm+Italy+EU+USA+Canada+Middle East+Turkey+Ferrari+Fiat Professional vans and trucks+Maserati+Abarth+Ram+Jeep+Alfa Romeo.

    The downside of this multibrand strategy is of course what you said: that a certain lack of prestige of 'bigness' or 'huge global sales numbers' may result in the non-core markets. Also, economies of scale (the ONLY thing that makes say Hyundai-Kia or even Toyota standout as carmakers, since they scarcely have any other brand identity or promise) are lower. And so American built cars and suv-s cannot be beneficially sold in europe or say in india, while indian-made inexpensive hatches and sedans under FIAT are scarcely sellable in Europe for FIAT or even in China for that matter, and so on.

    Another downside is the lopsidedness, geographically and segment-wise that results, causing possible vulnerabilities but sometimes strength as well: FCA is weak in China and Asia-Pac and India, for example, sales wise, FCA has no direct competitor to go up against the mass-commoditised-common-luxury German brands though it has brands ABOVE them (Maserati and Ferrari.) To solve both problems, though, Marchionne is focussing ONLY on one or 2 brands (Jeep and Alfa Romeo) rather than try to extend every brand everywhere.

    Why? Because it is TOO expensive and risky to do so: there are no profit margins, net net, if you have too many, highly commoditised/substitutable models (witness Hyundai), variants, in too many segments in too many cut-throat markets around the world. Ford has many more models in many more markets than fca, and yet makes 80%+ of its profits from just 2-4 models in the US market, VW is a sprawling empire than has, minus Audi, net margins of less than 2% and that too even before their ongoing self-inflicted dieselgate disaster, etc.

    The STRATEGIC question as far as India goes, then is a peculiar one for FCA: there is brand strategy clarity for all other markets and segments from them (e.g., Little Fiat in China, go with Jeep now and a couple of years later, Alfa+Chrysler; LatAm=non-european Fiat models+Jeep only, etc etc) ....

    EXCEPT for India. Is India a 'core' market for FIAT, like Italy, Turkey or Brazil etc? Why? Just because it is the oldest MNC brand in India, many decades older than even Maruti? If so, should India follow the 'premium within mass' strategy they've followed in Europe+Turkey (500X etc) and are now partly launching in brazil (Toro+....) or should they use versions of the new Brazilian mass-market Fiats (new Palio/Punto/Sienna etc)? Or should they ditch FIAT altogether and focus exclusively on JEEP, including a potential future very affordable (say 12 lakhrs.) Cuv/suv (also for exports?) A mix of all 3 approaches, made viable/less-risky, perhaps, by exports?
    jackharrisw likes this.
  5. gpunto75

    gpunto75 Amatore

    Grande Punto 1.3

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