TURIN -- Fiat CEO Sergio Marchionne's decision to delay the introduction of new products in volume segments is causing the Italian automaker to lose ground in Europe.
In two key European segments -- subcompact and compacts -- Fiat has aging products that won't be replaced soon.
The Punto subcompact, launched seven years ago, won't have a successor until early 2014. Plans to replace the Bravo compact, which went on sale in 2007, are on hold and Fiat may even import the car's successor from China.
Marchionne's latest product freeze to conserve cash in the slumping European market will hurt Fiat because:
- Subcompacts are Europe's biggest market segment by volume with 3.36 million sales last year, according to market researchers JATO Dynamics
- The compact segment, led by the Volkswagen Golf, is Europe's second-largest segment with 3.04 million sales in 2011.
Last year, sales of the Punto, Fiat best-selling model in Europe, declined by 19.2 percent to 225,261, according to JATO. The Ford Fiesta led the segment with 374,686 sales.
The Punto will come under increasing pressure as French automakers introduce fresh competitors this year. Peugeot will launch its 208 next month and Renault will introduce a new Clio in November.
Before Marchionne's latest product freeze, Fiat's five-year plan, announced in 2010, called for the Punto and the Bravo to be replaced in 2013.
The Punto successor's delay until 2014 has put pressure on Fiat's Melfi factory in central Italy, which is currently the only manufacturing plant for the model. Melfi has geared up for capacity of 420,000 units a year, but last year output stood at only 235,000 units.
Fiat sources told Automotive News Europe that styling for the Punto replacement has already been finalized. Now it is uncertain how Fiat will replace the car.
A Dodge from China?
Last year, Marchionne decided that the next Bravo would not be a conventional hatchback like the Golf. Instead it would be an all-new high-roof crossover inspired by the hot-selling Nissan Qashqai. Nissan sold 218,077 Qashqais in Europe last year and has sold more than 1 million worldwide since the car was introduced in 2007.
But the plan was put on hold late last year and Fiat is now considering importing the Viaggio compact car to Europe from China. The Viaggio (the Italian word for journey) is a reworked version of the Dodge Dart, which is based on the Alfa Romeo Giulietta.