TURIN -- Fiat-Chrysler CEO Sergio Marchionne's plan to improve slow sales of the Fiat and Lancia brands in Europe through rebadged Chrysler models is getting mixed results.
The Fiat Freemont, a rebadged Dodge Journey large crossover, is off to a good start. Fiat aims to sell 30,000 Freemonts in Europe this year. The carmaker sold 6,498 Freemonts in the first quarter, according to market researchers JATO Dynamics, so Fiat likely will achieve or come close to that goal.
But the Lancia Thema large sedan and the Voyager large minivan, rebadges of the Chrysler 300 and Town & Country models respectively, are selling at a slow pace.
Lancia sales have been hit by a new luxury tax introduced by the cash-strapped Italian government on Jan. 1. The tax penalizes buyers of cars with a horsepower rating of more than 252 hp. Owners of the 285-hp Thema gasoline version must pay 500 euros a year in luxury tax.
The Thema's diesel version and the Voyager are not subject to the tax, but sales of these models are slow because fewer Italians can afford to buy large vehicles.
"The typical Voyager buyer in Italy, a large family or a hotel owner, is delaying any vehicle replacement due to the general economic uncertainties," Piero Mocarelli, owner of Mocauto, one of Italy's largest Lancia dealer, told Automotive News Europe.
He said the Thema is seen as a luxury car so customers are shunning even the diesel version, which is not subject to the new tax. "After the introduction of the tax, the entire segment of large cars in Italy simply disappeared, with sales down by about 75 percent compared with last year," he said.
Italy is by far the biggest market for Lancia models. In the first quarter, Lancia sold 347 Voyagers in Italy and 995 in the rest of Europe. For the Thema, sales in Italy were 208 while it sold 272 in the rest of Europe.
This pace indicates a volume of about 2,400 units for the full year for the Thema, a quarter of Marchionne's 10,000-unit target.
Marchionne's goal is to sell 11,000 Voyagers this year, but first-quarter sales were 1,342.
Both the Fiat and Lancia brands are being hit by the collapse of their home market of Italy, where tough austerity measures are hitting consumers' spending power.
Total new-car sales in Italy declined by 21 percent to 407,000 in the first quarter. Lancia sales were down 13 percent to 20,589. Of the 21,000 combined sales target for the Thema and Voyager, Lancia had planned to sell 13,000 in Italy.
Fiat brand sales were down 26 percent in Italy for the quarter.