Fiat is
slashing its sales target for 2012 by half a million
units, a graphic illustration of the mounting problems
that the Italian carmaker is facing as it continues to
attempt to connect customers with its product range. The
realignment of the targets has been reported by
Automotive News.
The target for 2012 has now been revised to 2.2 million
units, down from the existing target of 2.7 million
which was outlined in the 2010 business plan. This
represents a reduction of 18.5 percent. However, Fiat
still believes that Chrysler Group can reach its already
stated target of 2.4 million units next year.
The 2010-2014 Business Plan (unveiled in Turin during
April 2010) also called for 2.3 million units to be sold
by the Fiat Group during this year. This target will
similarly be missed.
Over the first 11 months of this year, the Fiat Group
has notched up 886,178 sales in Europe (EU27 + EFTA).
When compared to its 1,004,518 sales during the same
period in 2010, that represents an unwelcome fall of
11.8 percent. That also leaves the Fiat Group as the
worst performer amongst the big nine carmaking groups in
Europe for the year-to-date and the only one to suffer a
double-digit fall. The most recent month on record,
November, saw the Fiat Group’s market share shrinking to
just 6.3 percent after total sales of 67,640 units, down
11.7 percent year-on-year. Outside Europe, the only
market where Fiat has any serious brand representation
is Brazil. For the year-to-date, it has 540,068
passenger cars sales (plus 144,415 LCV sales) in this
market – a figure which is relatively flat on the same
11 months of 2010. Overall, Fiat has seen its Brazilian passenger car
sales dip slightly this year, with its LCV sales slightly
up.
The new target predicts a total of 4.6 million units in
2012 (2.2 million from FGA and 2.4 million from Chrysler
Group). The 2010-2014 Business Plan called for 3.4
million units from Fiat Group in 2013 and 3.8 million in
2014, the final year of the presentation. The Fiat Group
split this up as 2.1 million units for the Fiat brand,
500,000 equally for Alfa Romeo and Fiat Professional,
300,000 for Lancia, 100,000 for Jeep and an extra
200,000 contract manufacturing units.
However, Fiat has recently reinforced its long-standing
reputation for failing to deliver on optimistic
projections. Group CEO Sergio Marchionne, in particular,
is earning a name in the industry for repeatedly missing
his confidently-stated, but wild and ill-thought-out,
targets.
The Fiat Group’s core problem stems from serious
underinvestment in its product portfolio over the last
five years, as well as an ongoing lack of serious effort
devoted to reducing Fiat’s traditional reliance on
Italy. The latter is a metric which is now suffering
acutely, as the Italian market is one of those being
squeezed by Europe’s sovereign debt crisis. However,
while Fiat’s management seeks to use the euro’s woes as
an excuse – suggesting that the delays represent a
conscious decision to align new model launches with a
‘structural recovery’ in the marketplace – carmakers
that continue to drive their strategy through a focus on
product, such as Europe’s biggest brand Volkswagen, have
gained significant ground this year.
On the plus side, Fiat should receive a real fillip from
the new Panda throughout 2012, although for the first
time this city car faces strong pressure in A-segment
from VW’s new Up!, along with its Skoda- and
SEAT-branded siblings. Fiat also has the benefit of the
new Lancia Ypsilon and Alfa Romeo Giulietta, the
forthcoming Fiat Ellezero, as well as the addition of
some rebadged Chrysler Group models, plus continuing
market demand for the Fiat 500. Its biggest problem,
however, remains the decline of its most important
model, the B-segment Punto, which has seen its share of
the segment contracting to just 4.6 percent for the
year-to-date. A successor will not appear until at least
2013, giving it a lifespan far longer than those of its
immediate rivals. The delay in developing a replacement
suggests Fiat has not heeded lessons elsewhere in its
lineup, where market share lost to rivals with fresher
lineups has proved extremely difficult to recoup.
According to AN, Fiat is basing its 2012 target
on a European market total of 14.6 million units, up by
around 700,000 units on this year’s expected total of
13.7 million. Total European sales are likely to be
below this, putting further pressure on the targets.
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