The 1990s – Lancia’s ‘lost decade’

Much of what went wrong with Lancia is evident in some of the products served up in the 1990s. For example, the Lancia Delta hatchback was originally planned for launch in the mid-1980s, but was the victim of several policy changes at Fiat and was actually launched onto the market in 1994. By then, it never really stood a chance and even the blindingly fast Integrale variant, which achieved rally success, could not stave off the criticisms. The Lancia Y10 sub-supermini hatchback (a debateable segment for Lancia to be heavily into anyway) also met criticism for poor driving dynamics. As for the Lancia Dedra, the BMW 3 Series pretensions were confounded by the sheer ordinariness of the car.

Fans of the marque’s heritage were left to lament the apparent absence of charm, talent and driver appeal in the company’s products. Sales went into decline in the 1990s. Lancia’s good period was from 1979 – when the first Delta was introduced – until 1990, the last time sales surpassed 300,000 units. Lancia output now runs at well under 200,000 units per annum.

Brand conundrum for Lancia’s parent

Fiat has been wrestling with a brand conundrum for a while. The problem is that its Alfa Romeo and Lancia brands overlap: both upscale and both sporting. Afficionados of the cars can debate exactly where each brand is, but there is no denying that there is overlap.  But both brands have their diehard supporters. The Lancia name still evokes an emotional response and many of its supporters say that its gradual weakening in the 1990s had more to do with Fiat’s inability to manage the brand properly than with anything wrong at Lancia itself.

In terms of brand investment and recovery, Alfa Romeo has been the focus of attention in recent years, a wave of wholesale product renewal beginning with the Alfa Romeo 156 in 1997. Lancia has looked to be effectively on hold.

Lancia takes premium position in the Fiat family

But now there are plans to revive the Lancia brand, spearheaded by a new flagship model, the Lancia Thesis. Moreover, Fiat’s thinking on where the Lancia brand is positioned has become a little clearer in recent months.

Fiat’s marketing people say that the Alfa Romeo brand is about sporting passion, driving enthusiasm and elegance of design. Its products are therefore increasingly targeted at young executives and professionals. The Lancia brand is being repositioned above that as a luxury brand, with cars that have Italian style, exclusivity and are overtly luxurious. The thinking is that they will occupy a ‘new luxury’ segment that is being re-defined by the likes of Jaguar, Bentley and Maybach.

From a group perspective, the linear line is Fiat products for when you are young, Alfa when you are a little older and Lancia when you are hugely successful in middle age and beyond.

Lancia’s Thesis spearheads the charge

Lancia invested 405 million euros in developing the Thesis, of which 184 million euros was for research and development and 221 million euros for tooling. The stakes are high. Lancia’s long-delayed flagship sedan is scheduled to debut next spring. The Thesis will be built at Fiat’s Rivalta plant, on the outskirts of Turin. With production capacity of 120 units per shift, the plant can make 53,000 units a year on two shifts.

The new Lancia Thesis

The replacement for the Lancia Kappa was designed at the Lancia styling studio by a team led by American Mike Robinson. Its design reflects the concept car Dialogos, seen at the Turin auto show in April 1998. It also shares styling cues with the so-called “Popemobile,” a one-off limousine built for Pope John Paul II at the end of 1999.

The Thesis has a traditional three-box body with a soft, classical contour, reminiscent of some past Lancias. A large chromed grille forming a typical Lancia shield dominates the front. The overall effect is considered to be fairly radical.

Beyond the Thesis sedan, body styles are less certain. A station wagon version is still under discussion. A limousine version, with stretched wheelbase and a luxury interior, is under development but not yet approved for production. There are no plans for a Thesis coupe.

The Thesis’s secret weapon will be its “Italianness” in the battle to win sales from the competition, which is dominated by the BMW 5 series and the Mercedes-Benz E-class.

The Thesis will debut with three gasoline engines – 2.0- and 2.4-litre five-cylinder units and a 3.0-litre V-6. A five-cylinder common-rail turbodiesel will also be available. It is understood that a gasoline V-8 engine, possibly the Cadillac North Star from alliance partner General Motors, may be added later. Prices will be announced near the launch date, but the Thesis range is expected to begin at around euro 35,000.

On the technical side, the Thesis will offer several world firsts, including a handbrake that automatically engages and disengages when stopping in heavy traffic or at traffic lights and solar cells in the sunroof that trigger interior fans to keep the interior cool when the engine is switched off.

The Thesis will also feature the Skyhook semi-active damping control system, made by Mannesmann-Sachs and due to debut on the new Maserati Spyder. Other innovations include Delphi‘s Easy Go keyless entry system and Bosch‘s Adaptive Cruise Control, both of which will debut on the new Fiat Stilo.

According to Fiat, the sound system in the car is so good, it would feel like sitting in a box at the La Scala opera house in Milan.

Thesis complexity brings development delays

“The Thesis has been dogged by delays caused by the need to solve electronics and reliability problems”

The Thesis has been dogged by delays caused by the need to solve electronics and reliability problems. Originally planned for introduction at the end of 2000, the car was first postponed to mid-2001, and then to the end of the year. Now customer deliveries won’t start until the spring – or even the summer – of 2002. Export markets will follow shortly after.

Suppliers involved in the project report that loading the car with sophisticated electronics  – from sophisticated navigation and communications systems to adaptive cruise control – has been a project management nightmare. Project suppliers report that no fewer than 46 on-board microprocessors are not interfacing as they should and that has delayed production approval.

In addition, it is said that the Thesis is overweight. Shortly after the strategic alliance with General Motors, signed in March 2000, Fiat Auto began considering the Cadillac Northstar 4.6-litre V-8 for the Thesis’ top gasoline engine.

The Thesis sales goals are relatively modest: 13,200 units in 2002 and 25,000 in 2003. However, doubts are being expressed in the industry about the ability of the company to achieve its volume targets.

More new product ahead

Following the Thesis, Lancia’s range renewal will continue with the Phedra, the successor to the Zeta full-size minivan that will debut in March or April 2002. In 2003, a new Ypsilon supermini will be launched. Fiat Auto’s medium-term target is to double its Lancia production from almost 150,000 units this year to 300,000 by 2008.

The late 2002 successor to the Lancia Ypsilon is expected to be based on the platform of the current Fiat Punto. The same platform will be used for a compact minivan for the Fiat brand, due in early 2003. The 2001 Fiat Ulysse and Lancia Z full-size minivan replacements are based on the traditional V-platform Fiat developed in cooperation with PSA/Peugeot-Citroen.

Premium ‘joint architecture’

Fiat and GM plan to develop ‘joint architecture’ for the premium brands of Alfa Romeo, Lancia and Saab. A new technical centre in Sweden has been set-up to achieve this. It is not being seen as platform sharing, as it incorporates some flexibility and allows for different vehicle dimensions. Cadillac will not be joining the premium club though.

It would be used mainly for Alfa Romeo, Lancia and Saab, and for Fiat and Opel niche models. It could feature sophisticated suspensions and four-wheel-drive systems. The so-called flexible “Premium Platform” could spawn a wide range of vehicles including sporty sedans, coupes, sport-utilities and crossovers.

Lancia’s revival follows Alfa’s

Alfa Romeo, which Fiat acquired in 1986, suffered for almost 20 years. Its true turnaround didn’t begin until November 1997 with the launch of the 156. Since then, sales have grown fast – from 113,800 units in 1996 to 250,000 units this year.

But historically, when Lancia was up, Alfa was down and vice versa. Fiat now wants to double Lancia volume to 300,000 units and Alfa’s to 500,000 by 2008. But the hard fact is that the new Thesis may not meet its modest sales target, will not make any money in its first iteration, and has styling that is controversial to say the least. And taking Lancia into North America looks some way off.

Annual Lancia production [1]  

 1990 …….. 313,000
1991 …….. 259,000
1992 …….. 206,000
1993 …….. 159,000
1994 …….. 167,000
1995 …….. 164,000
1996 …….. 150,000
1997 …….. 181,000
1998 …….. 175,000
1999 …….. 161,000
2000 …….. 170,000

[1] includes Lancia Zeta
made in France (Sevelnord)


Lancia production In Italy
by model

               1999        2000
Lybra ……… 25,982    51,037
K (Kappa)…… 12,535    6,939
Y (Ypsilon)…. 110,954   110,107
Dedra ……… 1,942   0
Delta ……… 6,307   0
Total ……… 157,720  168,083

Source: SMMT; industry sources  

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