Fiat’s European focus to be rebuilt around 500 family

The Fiat brand will be focused around the Fiat 500 and its Fiat 500X and Fiat 500L derivatives for the foreseeable future and may anchor itself outside of Europe as it looks to grow, according to Fiat Chrysler Automobiles (FCA) CEO Sergio Marchionne.

Reflecting at the Geneva motor show on the brand’s poor sales and fall to a market share of less than 5% in Europe, Marchionne said: “We can't be emotional. I know Fiat has 100 years of heritage and so on, but the truth is that its relevance has shrunk.

“We've had to make space for other brands to grow, and that has taken a lot of resources. Building Jeep as an SUV brand in Europe has required investment and chasing the attractive margins that Alfa Romeo and Maserati could deliver has taken time and resources; these things have been our focus in Europe.

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“We need to be careful that we don’t switch our focus to chasing the mass market in Europe at the expense of potentially higher-margin businesses. 

“We are lucky to have the Fiat 500 family, which we have extended, and you will see in our future plans that these models will be the focus of our efforts in Europe.

"The Fiat Panda family also continues to be interesting.

“But the Fiat Tipo - notwithstanding its sales success and the value that brings - I am less encouraged by, because that sector of the market is very crowded and not very profitable. It may have been a part of the market where Fiat traditionally stood, but perhaps we need to move on. I can even see that Latin America could be more relevant than Europe for the brand.”

Marchionne is set to outline his plans for the FCA Group to investors on 1 June, when he and his management team will reveal their strategy for 2018 to 2022.

Also expected to be revealed at that event is the future of the Alfa Romeo Mito. Sales of the ageing entry-level model have slumped in recent years, and Marchionne conceded: “If we do replace it, we need to consider the execution. A two-door hatchback with practicality limitations is not what the market wants.”

Marchionne recently described Jeep’s efforts in Europe as “lousy” and said that he had “run out of patience” with its performance. However, in Geneva, he pointed to sales that had risen 40% in the past two months and said: “It looks like someone listened. If we can grow sales by 40% every two months, I’m happy. Jeep looks fine now.”

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