With sales falling and a persistent lack of investment in new models, Fiat sees its ‘quandary’ as offering two choices. The first is to “remain focused on non-premium mass-market and rationalise capacity by closing one or more plants”; alternatively, it foresees a potential future leveraging the “historical premium brand heritage” of Alfa Romeo and Maserati, allied to a re-alignment and repositioning of the group’s product portfolio.

Fiat claims to prefer the latter option and proposes to coalesce around five strategies which it also lists in today's presentation:
1. Focus Fiat brand on 500 and Panda as pillar vehicles (brands within a brand) and derive all future products there from.
2. Reduce/curtail Lancia exposure, preserving uniqueness of Ypsilon and rely on Chrysler’s NAFTA development to feed European brand, if economically viable.
3. Focus on Alfa Romeo and Maserati to access higher-end of ‘bi-polar’ market.
4. Fully flesh out Jeep brand by developing appropriate products for European and international markets.
5. Continue to develop and maintain leading position in LCVs.

Fiat adds that its overriding objectives are twofold. The first is to utilise its EMEA (Europe, Middle East, Africa) production base to develop its ‘global brands’ – which it categorises as Alfa Romeo, Maserati, Jeep and the Fiat 500 'family' – and secondly, to shift a significant portion of its product portfolio towards higher margin opportunities.

That is followed by another optimistic slide, which lists 10 new Fiat models (including the 500L and Panda 4x4 for 2012, 500XL for 2013 and 500X for 2014), along with a staggering nine from Alfa Romeo alone, by 2016, with a refresh for the ageing MiTo and Giulietta pencilled in for next year. The fundamental composition of the Fiat brand is being reworked to centralise around the 500 and derivatives, with the presentation highlighting the company’s belief in its inability to “leverage [the] Fiat brand to move into C-segment and above.”

Worryingly for the group’s prospects as a volume manufacturer, however, it was today reported in The Wall Street Journal that, as a result of this decision, the carmaker’s volume Punto and Bravo models will be axed at the end of their life cycles, with no replacements. The strategy appears to reflect Marchionne’s belief that each individual product must ‘pay its way’, with no cross-subsidisation allowed for models which cannot generate a profit – even if there may be good reasons, such as the retention of market share, to maintain a presence in certain segments. The decision to scale back the Fiat brand to just A- and B-segments, with the associated lack of presence in significant volume segments, may help explain recent media reports that Marchionne had proposed a merger between three mass-market manufacturers in Fiat, Opel and PSA. (Marchionne has since denied the reports.)

Moreover, a closer reading of Fiat’s plans is enough to bring about scepticism as to their accuracy. For instance, Maserati’s entire model range, including its forthcoming Jeep-based Levant SUV, is now set to be built in Italy – flying in the face of previous assurances that the latter would be built at the Jefferson North Assembly Plant in Michigan. Similarly, Lancia’s sole scheduled refresh, due for the Ypsilon in 2015, is classified as an update which will come from an Italian factory – yet the Ypsilon is currently manufactured in Poland. The implication is thus that the Ypsilon’s production will be moved from Tychy to Naples, where it would be built on the Panda line. Whether these, and a number of other plans, have been included to satisfy various stakeholder interests in Italy, only time will tell.

However, it should be noted that in its lack of specificity about future plans, this outlook differs from previous Fiat presentations. According to Marchionne, this was a conscious decision. “We’ve had a lot of internal discussions about whether I should provide a higher level of granularity in terms of product offerings and product launches,” he told investors. “Because of the phenomenal amount of consternation that has been caused after we launched Fabbrica Italia back in 2010, and the inability of the system to react to our reaction to a degrading demand function, and the fact that that project effectively had to be shelved due to changing market conditions, we have decided to follow what our competitors have done historically which is to not provide a lot of details and effectively execute under development plans as they saw fit.” However, critics have speculated that the decision not to detail specifics is as much about being able to more easily facilitate the inevitable changes and cancellations to the plan, without breaking explicit commitments.

Importantly for Italian car fans, the plan also effectively foreshadows the axing of the storied Lancia brand. Notably, Fiat management were unable to bring themselves to admit the flawed nature of the plan to rebadge Chryslers as Lancias; instead, ignoring the various difficulties pointed out by a myriad of critics, it is described in the presentation as an arrangement “hindered by market condition[s]” and Lancia’s “limited brand appeal” outside of Italy. Fiat’s solution for this dilemma is to double-down on its commitment to Americanise Lancia’s offerings, with Marchionne making clear that, Ypsilon apart, the brand’s future – if indeed it has one – lies solely in rebadged Chryslers, built in North America.

Fiat sees synergies with this new strategy: “Products needed for competitive offering in Europe are complementary to those produced in NAFTA and LATAM where production capacity is or will soon be saturated as Chrysler product offering continues to be renewed through 2015,” it says in the presentation. It adds the target is to to utilise up to 15 percent of capacity for export, especially for the forthcoming Jeep smaller SUV, Alfa Romeo and Maserati brands.

Given that the company’s Italian factories currently run at around 50 percent of capacity, it remains unclear how they will be utilised if the push towards investment in Fiat’s global ‘premium’ brands is only set to boost capacity usage by around 15 percent, as around 80 percent usage is typically considered the minimum threshold for profitable output. This also does not include the decline in capacity usage which would result from the axing of mainstream models such as the Punto and Bravo.

Breaking down its EMEA targets, Fiat confirmed that its 2012 confirmed trading loss will come in at €700 million. It projects the next year’s European market is likely to be flat, that the EMEA loss is expected to come in at a similar or slightly lower level, and that “actions on product plan and commitment of capital to Italian manufacturing sites are dependent on respect and compliance with new labour agreements; will require 24-36 months for implementation and will allow Fiat-Chrysler in EMEA to recover some market share in a more rational market and to act as export base for sales by other regions.” Given the above preconditions, Fiat believes that break-even is achievable in 2015-16.

Marchionne has also scaled back his production target of 6 million cars by 2016 (including Chrysler Group) to 4.6-4.8 million.