Saad Chehab, the new head of Fiat’s Chrysler and Lancia brands, has taken on the challenge of convincing sceptical European drivers that a Chrysler sedan and minivan imported from North America and rebranded Lancia are worthy alternatives to the Audis or BMWs they are used to driving.
The former Chrysler marketing executive will oversee the launch this autumn of the new version of the Chrysler 300 as a Lancia Thema, built according to the same specifications as rival models but at what he says is a competitive price.
Go deeper with GlobalData
“One of the selling points is accessibility,” he told Down Jones in an interview ahead of the press launch of the Thema (300) and the Voyager (Town & Country) in Turin.
“In these times of crisis, we think that we have an opportunity,” he said, saying he expects people to start looking for more value for money.
Chehab’s sales target for the Thema is between 15,000 and 20,000 units a year. The starting price in Italy will be EUR41,900, within the lower half of the price range for premium sedans in the so-called E segment of the market, according to JATO Dynamics.
Twinning the Lancia and Chrysler brands and sharing platforms and dealerships in their respective markets reflects Fiat’s plan to share with Chrysler the cost of building and selling vehicles. Fiat owns 53.5% of the US automaker.
Lancia is helping Chrysler expand overseas, while the US brand’s 300 and Town & Country are broadening Lancia’s product offering, which has been limited to smaller models like the Ypsilon hatchback.
Fiat’s image as a maker of small cars has hampered its efforts to expand into the higher – and more profitable – segments of the European market, even with its more upscale Lancia brand.
With these two Chrysler models, Fiat will renew Lancia’s push into the premium segment as well as beyond Italy, where Lancia makes most of its sales.
“The biggest challenge is how do we grow these brands outside of their markets,” Chehab said. “They’re well known in their home markets. It’s not the same situation in the rest of the world.”
For Chrysler, Chehab also has his eye on Brazil and China, two markets with big growth potential.
After upgrading its product line and overhauling its dealership network in the US, Chrysler has seen its sales rise as it slowly shakes off memories of its 2009 bankruptcy and reputation among US consumers for poor quality.
In Europe, it will sell its models under the Lancia brand, with the exception of the UK and Ireland where consumers are more familiar with the US marque. The Dodge brand has been dropped there.
Both the Thema and the Voyager are made in Ontario, Canada.
Chehab is hopeful drivers will grow tired of their Audis and BMWs and be ready to try something different. And the new Chrysler 300’s good reviews in the US give some weight to his confidence. “It looks like we’re heading in the right direction,” Chehab said.
But Chrysler and Lancia will have a lot of ground to make up.
In the first nine months of 2011, their combined sales in the European Union totalled 77,974 cars, 10.4% lower than in the same period last year, according to the latest industry figures. Their joint market share didn’t even reach 1%.
And German automakers dominate the E segment in which the Thema will be sold in Europe.
Nearly 40% of sales in this segment are made in Germany, according to JATO Dynamics. Between January and August, BMW’s 5 series, Daimler’s Mercedes-Benz E-Class and Volkswagen’s Audi A6 were the top three, with combined sales of 209,128 units, or 66.51% of the total. The old version of the Chrysler 300 sold just 411 units.
