As Fiat Auto continues to struggle, a reversal of policy more in line with the company finances is to be introduced – vehicle face-lifts. This should provide an interim sales boost whilst times are hard and before new models are ready to be released.

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Fiat Auto’s new CEO Giancarlo Boschetti has reversed a fifteen-year old policy of not revising or ‘face-lifting’ its models. The policy, implemented by Mr Boschetti’s predecessor Paolo Cantarella, allowed a broader range of new vehicles, often sharing the same platforms and engines, but saw sales decline as products aged.

The new strategy will allow Fiat to refresh many models in its existing line-up with the hope of reviving flagging sales whilst negating the need for wholesale revisions and launches, which would prove costly for the financially-stricken firm.

Alfa Romeo will be heavily affected by the decision, as its entire range will be updated by mid-2004. The GTV and Spider models have already been revised and will go on sale in May. This offers an ideal opportunity for Fiat to assess the strategy: with only 99 units sold, 54 lower than Aston Martin’s flagship supercar the Vantage, the Spider was one of the worst-selling vehicles in the UK last year.

The Punto is in the process of being updated and will be released with a new 1.3 diesel engine, which Fiat hopes will boost sales in the increasingly important diesel-supermini segment. Despite its small capacity, the new engine promises to be well-refined, with low emissions, excellent fuel economy and relatively good performance – the combination of a very high pressure injection system. The face-lifted Stilo and Multipla models will follow in 2004.

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Fiat will be hoping that its strategic u-turn will give the company sufficient breathing space to enable new models to be developed and bring the company back on track. Putting a new face on an old model should work for Fiat as an interim sales boost while times are hard. However, Fiat must also work hard to push new models through before the new look old models appear tired once more.

SOURCE: DATAMONITOR COMMENTWIRE (c) 2003 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.