Fiat plans to exit Europe’s minicar segment


MILAN — Fiat Chrysler Automobiles plans to quit Europe’s minicar segment, where it is the leader, joining other automakers in axing their smallest cars because of increasing development costs to make them meet tougher emissions limits.

FCA CEO Mike Manley said the automaker plans to try to shift Fiat’s minicar customers to the “B” (subcompact) segment.

“In the very near future you will see us refocus on this higher-volume, higher-margin segment, and that will involve a move away from the minicar segment,” Manley told analysts on FCA’s third-quarter earnings call on Oct. 31.

Manley did not give the timing of the move.

The retro-styled Fiat 500 three-door hatchback and the Panda functional hatchback dominate Europe’s minicar segment but they are aging and are due for replacement.

The three-door 500 is 12 years old. It was launched in July 2007 with retro styling inspired by Fiat’s original 500 launched in 1957, a car that became an icon. European sales of the 500 fell 9 percent to 100,150 in the first half of the year.

The third-generation Panda went on sale in February 2012 and its sales rose 15 percent 105,534 in the first half, according to Automotive News Europe’s sales by segment analysis.

FCA posted a 55 million euros loss ($61 million) in Europe in the third quarter.

Manley told analysts that Fiat’s “commercial challenges” in Europe stem from a very high exposure to the low-margin minicar segment, and a model lineup whose average age is “the highest in the industry.”

Fiat now plans to win back customers in the small-car (subcompact) segment it exited last year when the Punto hatchback was discontinued.

The Punto had been Fiat’s best-selling car in Europe for a long time but former FCA CEO Sergio Marchionne said its sales were not large enough to build a successor profitably.

Fiat will aim to shift loyal minicar customers to subcompact cars while also keeping customers who still own a Punto, Manley said.

The small-car segment is Europe’s biggest and is “a much higher profit pool than the A (minicar) segment,” he said.

Manley did not discuss which new models Fiat will introduce in the subcompact segment. He also did not comment on the future of the Panda and 500.

FCA’s planned merger with PSA Group would give Fiat access to PSA’s Common Modular Platform, which underpins the group’s newest small cars such as the Peugeot 208 and Opel Corsa. These cars have full-electric versions as well as versions with internal combustion engines.

Fiat also currently sells other cars that use the 500 name but compete in small-car segments. The 500L led Europe’s small minivan segment in the first half with sales of 24,112. The 500X was the 10th best-seller in the small SUV/crossover segment.

The 500L and 500X are underpinned by small US wide platform that is also used for the Jeep Compass and Renegade. The Panda and 500 use Fiat’s mini platform.

JATO Dynamics analyst Felipe Munoz said he doubts that Fiat will quit the minicar segment completely.

Fiat might improve the content and pricing of the 500 and Panda hatchbacks “to have them play in the small car segment,” he told Automotive News Europe.

Fiat could also try to replicate the 500 hatchback formula with a slightly bigger car, he said.

The Lancia Ypsilon — sold as a small car but built on the same minicar platform as the Panda — is an example of how this could work, Munoz said.

FCA joins other automakers that are rethinking their small-car strategy in response to costly new European Union legislation covering safety and tailpipe emissions, in particular the output of CO2.

Ford and Opel have already exited Europe’s minicar segment. Ford is stopping importing to Europe the Indian-built Ka+ while Opel has dropped its Korean-built Karl and Adam models.

Volkswagen executives have said privately that the automaker is preparing to drop combustion-engine versions of the Up minicar, which would almost certainly mean the fuel-powered Seat Mii and Skoda Citigo would also disappear.

Products You May Like

Articles You May Like

Fiat Chrysler to list robotics unit Comau after PSA merger
Looters Vandalize And Wreck Porsche 911 GT3 RS In Los Angeles
Coronavirus: UK sees almost no car manufacturing in April
2021 BMW 4-Series
Bugatti Chiron Pur Sport, 2020 Honda Civic Type R, 2021 BMW 5-Series: This Week’s Top Photos

Leave a Reply

Your email address will not be published. Required fields are marked *