Why Fiat brand chief Francois says next compact will be like Ikea

Fiat brand CEO Olivier Francois says that the Italian automaker’s upcoming Aegea compact hatchback and station wagon for Europe will be “like Ikea, affordable but smart.” Francois explained why to Automotive News Europe Correspondent Jennifer Clark.

Will the forthcoming Fiat Aegea compact line for Europe be inexpensive like the Panda?

It will be functional and not loaded with features that the buyers don’t want to pay for. If you compare it with the Bravo [Fiat’s previous compact model line], it will cover the same market space with two bodies [the hatchback and wagon] and a clarified mission: We will be careful to give you what you expect. Like Ikea, affordable but smart.

Will Europe get the Aegea sedan?

We will not force a C sedan on Western Europe knowing that there is no market for it.

In your presentations in the past, you have said that the Fiat brand in Europe would evolve around two pillars: an emotional range led by the 500 family and a rational range built around the Panda. FCA CEO Sergio Marchionne said at the last Geneva auto show that Fiat brand won’t be mainstream anymore in Europe. If that’s the case, how does the Aegea fit into Fiat’s plans for Europe?

When I talk about the Panda, I never meant I would make big Pandas or smaller Pandas. The approach is frugal, well built and practical. My blue jeans pillar. On the other side, you have the red lipstick or red leather pillar represented by the 500.

We presented the Aegea as a sedan for Turkey, but we will have a line of C-segment [compact] cars that will address that frugal, practical and well-built pillar.

Also, the Aegea was already part of the product plan we shared in May 2014. You had the little dots on the C. Those three dots represented the sedan, hatch and station wagon.

And, Fiat brand is not mainstream because the last thing we need is a “fake” Jeep or a super sporty car when I have a brand like Alfa Romeo. What we can do and what we do well is A, B and C [the minicar, subcompact and compact segments]. I want to develop A-, B- and C-segment vehicles along the emotional and functional pillars. I love the idea that we have this chance to speak to both.

Except for the 500 hatchback that you sell globally, Fiat brand has very different product ranges in Europe, Brazil and China. How and when will the Fiat range converge into a global offering? If not, why?

Brazil is a champion for functional cars, but they don’t have the same regulations [as Europe]. If I bring something from there to Europe, I will not meet the CO2 and safety rules. I would love to have a global product because I would save money, but I would give my Brazilian customer a car with stuff he is not willing to pay for at this moment. If you are not a market leader but a challenger, you can import a [Citroen] C3 or whatever and people will pay for stuff they are not aware is in the car. [With this model] you save on the r&d. If you are fighting for market leadership [Fiat is the top-selling brand in Brazil], you have to be careful with your pricing. I can’t load the car with stuff the customer isn’t willing to pay for. So either I price for it [charge more for the additional features] and lose leadership, or I don’t price for it and I lose profitability.

Do you see this changing?

I don’t, but our time-to-market is short enough to react when the time comes. I would love to converge on a global platform to save on r&d, but this is not always as beneficial as it sounds because I would make a trade-off between my volumes and profitability in Brazil, or my CO2 emissions or my brand image in Europe. I can’t do that.