Enrico Fossati (below) is Fiat Auto's sales and marketing director for Area 'B' - Fiat's term for all global territories outside the main markets of western Europe and Latin America. Fossati spoke with Automotive News Europe's Luca Ciferri.
What is your biggest challenge in central and eastern Europe?
We want to offer the same buying experience and the same service in those areas as we offer in western Europe. We want well-trained managers that we can interchange between different markets. We want to develop uniform standards of back-office work. We are taking promising young people from eastern Europe and bringing them to Turin for two years.
What is the biggest problem facing your operations in the region?
Getting credible market figures. In central and eastern Europe, only Slovenia gives official registration figures. All the other countries still rely only on the manufacturers' sales declarations, which we don't always feel are 100 percent correct.
Fiat Auto's market share in Poland fell from 41.7 percent in 1996 to 27.6 percent in 1999. Why?
That is mainly due to increased competition and a wild price war started by Daewoo. In 1996 we sold 165,431 units in Poland. Of that, more than 60,000 units were the old Fiat 126. Last year we sold 176,777 units - and fewer than 30,000 126s. So we sold more units and with a higher unit price.
The Polish market is expected to decline 17 percent to 510,000 units this year. What's changed?
A strict budget law approved in November 1999 resulted in a higher vehicle sales tax, followed by additional taxes introduced this April. In the meantime, interest rates rose from 12-13 percent to 18 percent. Insurance costs increased considerably and gasoline prices doubled. A slowdown was inevitable.
The Russian new-car market was 900,000 units last year, but everyone says Poland's is bigger. Why?
In Russia, there's a big market for old-fashioned cars. Prices are under $5,000, but the average transaction price is about $3,600. This market was about 860,000 sales last year. It is restricted to local producers.
Then there's the true new-car market of about 40,000 units of imported or locally assembled contemporary vehicles. Half are luxury vehicles and half are western passenger cars with prices starting from $8,000. The latter area is where we want to compete.