Fiat Auto has got itself back on track by returning to its roots as a mainstream manufacturer of small cars, it is now developing more ambitious plans for the C-segment with the replacement for the Stilo next year which will be called Bravo. Luca De Meo outlined Fiat Auto’s plans to Chris Wright.
Luca De Meo, senior vice president, brand and commercial, Fiat Auto, said: “We need to regain credibility in the C-segment for the first time in 30 years.”
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The Bravo will be launched in the first quarter 2007 with fairly low volume expectations, around 120,000 a year – in sharp contrast to the 400,000 a year expected of Stilo.
“Now we prefer to be conservative and to get the quality right,” said De Meo. “It’s a question of getting the balance right and of course if more people want to buy a Bravo, we will find ways of making more.”
It’s a similar strategy to when Fiat launched the Multipla, although De Meo acknowledged the company got that all wrong.
“It was a missed opportunity, nobody saw how the compact MPV market was going to explode and we let the Renault Megane Scenic steal our thunder. “Multipla was also based on a unique spaceframe platform which was very expensive for the low volumes we initially planned.”
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By GlobalDataAs well as starting with low volumes, Bravo, he said, would also return to Italian values of style, value for money along with improved quality.
“It will also be free of gadgets,” he added.
“Stilo came with lots of gimmicks but Fiat customers are just not interested in them.
“We are also looking at running costs and residual values in terms of the fleet markets.”
This could also eventually lead to a return one day to the daily rental market.
Fiat had undergone “cold turkey”, De Meo said, by pulling out of the car rental market.
“We needed to do something drastic and we needed to fix and clean the house.”
De Meo, who previously held sales, marketing and brand positions at Renault and Toyota in Europe, returned to Fiat Auto in 2002 as Lancia Marketing manager, and then brand manager in 2004.
He was part of the management team that revived the image and volume of the Lancia marque in Italy and he said he would like to see it make a comeback in key European markets.
Both Lancia and Alfa Romeo, he said, had been badly integrated into the Fiat Auto group in the past. “They were Fiat-ised which was the wrong thing to do and we want to avoid this happening again.
“We have a portfolio of brands with heritage and we have to manage the synergies properly. Fiat’s history is in small cars and we have worked hard to improve our costs and quality so that we can make money out of vehicles like the Panda.
“We are also rebuilding our relations with the dealers and the first part of this operation was to increase profitability for Fiat as well as its network. Having profitable dealers is as important as being profitable ourselves. They have been losing money and their turnover has been down.
“Certainly in Italy the network is improving and things are getting better. In the longer term we have to help them out, particularly in big cities such as London, Paris, Rome etc where we will be looking to establish our own outlets.”
Fiat currently has 45 of its own dealerships across Europe. “If we have to go to 60 to get them in the right places then we will,” he said.
De Meo said Fiat would not be pushing its dealers into expensive re-branding exercises as the Group’s revival takes shape. Fiat is working with IKEA to make the cost of fitting out dealer showrooms easier and cheaper.
He added: “It’s a corporate identity concept that is innovative and economical for dealers – they can walk into any IKEA outlet and get the furniture they need. The idea is not to turn the dealership into an IKEA showroom, but to allow dealers to get cheap, practical and nice looking furniture.
“Dealers will have a choice of going for the standard corporate identity or going to IKEA. While we want to encourage private entrepreneurs, we don’t want to see them go broke.”
“I am always looking to get concepts and ideas from other business sectors.
We can learn from IKEA, the dynamics of people moving through the showroom for example.”
By the end of 2008 all dealers will have a clear identity and Fiat will have around 2,000 points of sale across Europe, he said.
De Meo added that Fiat was making money in South America but had lost ground in Eastern Europe, which it hoped to make up with new B- and C-segment models.
In India there is now a tie up with TATA where the networks have been merged so that TATA dealers sell Fiats.
De Meo added: “India will become increasingly important to us as will China where we have to make sure we have the right products – you can no longer get away with old generation products in these places.”
Fiat is also progressing plans to re-launch the 500, a project being developed with Ford which will also be the basis for the new Ka.
He said: “Like the Mini the 500 is an iconic car so we have to make sure we do it properly. If you are going to do something retro you still have to remain true to the original concept which is what BMW did with the Mini but Volkswagen failed to do with the Beetle.
“The original 500 was cute, but it needs to be modernised – we will never be able to get it under 3-metres long again because of crash protection requirements.”
Chris Wright
