Model strategy will define Fiat/Chrysler alliance
By: Glenn Brooks, Friday, May 01, 2009, AutomotiveWorld.com
Peering into the future at Fiat Group and Chrysler LLC model plans, one might be forgiven for wondering why on earth these two firms would get involved with one another. Put simply, even if Fiat retains, say, Magna to fast-track new models (the Tier 1 supplier morphed the outdated Fiat Stilo into today’s Bravo in under 24 months) we are looking at two more years until smaller-engined fresh products hit showrooms in North America and elsewhere. The question is, can Chrysler really compete effectively in the North American light vehicle market for that long and will even these types of vehicles be enough?
If gasoline stays cheap, possibly a big if, next year’s replacements for the Chrysler 300 and Dodge Charger twins could be winners in North America, especially if the beautiful 200C concept from January 2009’s Detroit auto show is an indicator of a much-needed styling revival at Chrysler. But what about the smaller Sebring and Avenger? An emergency facelift is on the way but these cars cannot realistically be expected to last until their scheduled replacements arrive in 2012.
Chrysler should emerge from bankruptcy with a few highly-profitable models and concentrate resources on brand building. Elegant cars for Chrysler, pick-ups and minivans for Dodge, more fuel efficient and less brutally-styled SUVs for Jeep. But will that be enough? And where can Fiat Group cars fit in its strategy?
In an overcrowded, addicted-to-incentives US market, who could be persuaded to pay a premium for something like a Fiat Bravo replacement? Fiat has all sorts of goodies in the pipeline (2010: Lancia Deltina, Alfa Giulia, Alfa Milano, Fiat Multipla; 2011: Fiat Punto 4 and Panda 3; 2012: Fiat Bravo) but which, if any of these has been engineered for US and Canadian emissions and impact standards? And presuming the decision is made to push some of these cars into the region, how can all that expense be justified?
If Fiat really is determined, for reasons unknown, to return to the US market, it would surely have to try for a premium image. Forget fears about Americans associating Fiat Group vehicles with rust and mechanical weakness. The US has a young population and today’s buyers simply do not remember these old cars of the 1980s. In several Pacific Rim markets, where the group had similarly awful quality problems way back, Fiat and Alfa now have an ever-improving track record and are thriving thanks to a heavy dose of la dolce vita-style marketing. Remember also, the experience of Mini and smart in the US – aspirational advertising and cars loaded with pricey but seemingly essential options (the BMW model).
So the question remains; can this alliance be made to work? If what each partner wants and needs out of the deal is clearly stated, as it was when Renault rescued Nissan, then it may succeed. Nowhere is this clarity required more than in the all-important product area, where the ultimate success or failure of the alliance will be determined. The brutality of reality needs to be running through every decision soon to be made in Auburn Hills, Turin, Washington and a certain bankruptcy court in New York.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Published on Friday, May 01, 2009
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