Fiat will solve the doubts of its future with the 2018-2022 plan

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The future of Fiat -as an FCA brand- is not so clear lately. Next Friday, June 1, Fiat will present its strategic plan 2018-2022, in which Sergio Marchionne should clear up doubts about the future of the legendary Italian brand. Its flagship products begin to exhaust their life cycles.

The best-selling model is the Fiat 500, which will be 11 years on the market on July 4. Despite the model’s seniority, and that it is not the cheapest model in segment A, it resists with a lot of authority and the restyling of 2015 breathed new life into it. It is a resounding success, the problem will be to maintain that lead with his successor.

Fiat now has its range divided into popular and aspirational models. In the first group are models such as the Panda, the Point or the Type, good solutions for a reasonable price. On the other side, the family 500 or the Spider 124, which do not aim to have the lowest price, but offer an extra.

In the previous 2014-2018 business plan, eight new models were announced for Fiat, of which only five have reached the market. On the other hand, the mythical Punto will say goodbye definitely in July after a commercial life of 12 years and several restyling. A successor has not been announced for him.

In utility, Panda needs a replacement that could arrive by 2020, and the manufacturing will move to Fiat Tychy (Poland), where the 500 and 500C are already produced. This means that Italy will stop producing the Panda, leaving room to manufacture higher value-added models, given higher manufacturing costs than in Poland.

When that happens, Fiat’s popular models will be produced outside Italy, in countries with the most competitive labour costs: Poland, Serbia and Turkey. Part of Marchionne’s strategy has been to promote the most aspirational brands of Fiat Chrysler Automobiles, which are Maserati, Alfa Romeo and Jeep.

Fiat 500X Blue Sky Edition

Fiat continues to lose terrain in Europe in the absence of new models and a range of crossovers designed as such, not disguised derivative versions such as the Panda Cross. Last year, 783,769 Fiat were sold in Europe; according to IHS Markit, in 2019 it will lose 14% of its sales, up to 677,029 units.

Neither does it look good in Brazil, one of its most powerful markets. If in 2013 it had a market share of 22%, in the first quarter of 2017 it fell to 9.2%. Closed March 2018, the market share has remained at 8%. This field is being won by competitors with a fresher and more competitive product.

The entry to the US market has not been as good as it was wanted. Only the aspirational range is available there, namely their, 500X, 500, 500L, 500e and 124 Spider (remarked on the Mazda MX-5). Regarding the 500e, Fiat loses money with each unit sold, since its recommended price (MSRP) is only $ 32,995. By the way, the American 500 is slightly different from the European.

Fiat 500L (American version)

When the next generation of the 500 arrives, you will need a fully electric version with a more competitive cost. According to an unnamed supplier cited by Automotive News Europe, the future 500e will have a global sales target of 60,000 to 80,000 units per year.

Several analysts doubt Fiat’s ability to take off, just look at the what has happened with Lancia: it finishes its history selling a unique model (Ypsilon) and only in Italy. Can Fiat return to produce popular, economic cars, and face the invasion of SUVs, even if they are not made in Italy, or will have to focus on aspirational models?

Even in Italy Fiat is losing ground, despite having dominated the market for decades. From January to April 2018 sales have fallen by 15% compared to 2017, which is a lot. Paradoxically, in Spain Fiat as a brand enjoys very good health. The 500 was the 9th best selling model so far this year and the brand was tenth in April.

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