Fiats 500 has, effectively, become a brand in itself

Fiat's 500 has, effectively, become a brand in itself

The core brand of Fiat Chrysler Automobiles - with a 116-year history of innovation and sales success - is reducing in importance as other parts of FCA go for global growth...

It had been clear for some time but at the Geneva Motor Show in March, Sergio Marchionne spelt it out: 

"Fiat no longer intends to offer a full range of products like other mass brands. There are two reasons - the economics are not there to develop these cars and the FCA portfolio takes their place. It is a catharsis but we are addressing brand overlaps."

Brand overlaps would reach epic proportions if Marchionne succeeded in merging FCA with General Motors but that doesn't look a realistic prospect. An eventual accommodation with Mazda or Suzuki seems more likely, which would further isolate the Fiat brand, once the undisputed leader of the European market.

Marchionne isn't sentimental nor is he especially interested in past glories. Fiat of Italy may have been the starting point for his audacious takeover of Chrysler but he sees no need to project the parent brand in the wider corporation he has created.

In Europe, Fiat was already in decline before FCA existed. The launch of the 500 in 2007 was one of Marchionne's early successes and, in effect, has become a brand in itself. Following the paradigm of BMW's Mini, the miniature 500 spawned a range of cars (500L, 500X) which, name aside, are unrelated. Fiat could - maybe should - be renamed the 500 Car Company.

On 4 July, the ninth anniversary of the 500 revival, it will present a new version of the original. Together with the Panda, which uses the same platform, the 500 is the market leader in the European city car A-sector.

Aside from the various 500s, in Britain and most of Western Europe, the Fiat brand now offers only the Panda and the Punto. Both of those will be replaced in due course but there is no plan for larger models to follow on from the Bravo and Croma or to enter the market niches that every other mass producer seeks to fill.

Other brands in FCA do that job - Jeep worldwide and Chrysler and Dodge in the US - and last week we saw the Giulia, the first of a new generation of Alfa Romeos which is pitched at the compact premium market, the BMWs, Audis and Mercedes which have eroded the mass producers' middle ground.

Running a multi-brand, multi-national operation can get complicated. Four years ago, Marchionne thought that Alfa needed a two-seater sports car to re-capture the spirit of the Duetto in the 1960s film The Graduate. He asked: Who makes the best small sports car? The answer was clear - Mazda. So he did a deal with the Japanese company to purchase the new generation MX-5, a special version styled in Italy but made in Hiroshima.

In the meantime, a 1,000-strong taskforce had been put together to develop a complete new range of Alfas, which Marchionne pledged would all be made in Italy. So the MX-5 derivative, due next year, becomes a cuckoo in Fiat's nest instead. It will be called the Fiat 124 Spider, the name of a rally champion in the 1970s, and, like the original, can be expected to develop into a high-performance Abarth in due course.

Although the Fiat Freemont, a large SUV crossover sold in the US as the Dodge Journey, has been successful in Italy, Marchionne said that a future Fiat SUV is 'impossible', and Olivier Francois, the FCA marketing chief who has responsibility for the Fiat brand, said at the recent Automotive News Congress, 'I am not going to force a product that doesn't fit the brand'. Behind those comments is the knowledge that Jeep's annual volume has grown to be almost as a big as Fiat's 1.2 million.

So Fiat, one of the companies that put the world on wheels, is relegating its core brand simply to one of a portfolio, offering small and generally inexpensive cars and light commercial vehicles. In some territories, Fiat, without 500, will remain FCA's most important player: Brazil and Argentina, where it is the market leader, in India, and some parts of Asia.

The Aegea compact saloon, announced a few weeks ago and made in Turkey, will be sold in some parts of southern Europe and in markets further afield. The new Punto will be presented as a world car, replacing some of the older models that endure in South America and India, but is unlikely to present a serious challenge to Ford Fiesta, Opel Corsa and Volkswagen Polo in the European mainstream.

This is a far cry from the small Fiats of old that topped the European sales charts - Punto sold more than 650,000 a year in its heyday - and regularly won Car of the Year awards. In the 1950s, the Fiat 600 and 500 were the Italian equivalent of the Volkswagen Beetle, introducing large numbers to car ownership for the first time. With 128 and 127, Fiat took the concept of the BMC Mini - transverse engine and front-wheel drive - and created the blueprint for the modern family car. It pioneered automation on the production line - remember the lampoons of the Ritmo/Strada adverts 'Built by robots, driven by idiots'? - and, with the Uno, achieved a universally-admired fusion of practicality and Italian style.

That was a different time - and a very different company. Marchionne is possessed by the idea of economies of scale and reducing capital consumption, sharing technologies, components and factories, and avoiding duplication of engineering effort. FCA encompasses 11 brands and is moving towards each having its own specialization and a smaller number of models.

The logic is that if one type of vehicle falls from favour, another brand should be able to move to the forefront. Right now, it is Jeep that is in the ascendancy and Fiat is on the back-burner.

It is one way to run a corporation - Sergio Marchionne's way. 

See also: COMMENT: Time for Alfa - or Sergio - to go?

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more