Fiat market share drops to historic low in Italy

The Fiat brand, which once controlled more than 50 percent of the Italian market, saw its share fall to 9.9 percent there in March, according to official figures released by the transportation ministry. That is Fiat's worst share since the statistic has been calculated.

The Italian auto market was hard hit by coronavirus restrictions for the month, losing 85 percent of volume as showrooms closed by the second week of March. But Fiat brand’s sales tumbled by 91 percent and the results in March followed a long and steady decline.

Experts say there are several reasons for Fiat’s market share loss:

• The brand has not invested in its lineup
• A number of slow-selling models have been dropped
• Fiat stopped pushing sales in short- and long-term rental channels this year.

According to UNRAE, the association of car importers in Italy, Fiat’s share dropped to less than 40 percent in 1990 and below 30 percent in 1998. It was at 21 percent in 2004, when Sergio Marchionne was named CEO. It rebounded to 26 percent in 2009 because of a fiscal stimulus introduced by the Italian government between 2007 and 2009 and the launch of the Grande Punto small hatchback in 2005. 

Fiat’s market share was still at 20 percent in 2017, when more than 400,000 units were registered in Italy, with a total market of 1.97 million units. By 2019, Fiat’s share was 15 percent.

Among private customers, Fiat’s share has fallen from 15 percent in 2017 to 14 percent in 2018 and 12 percent in 2019, according to market researcher Dataforce.  

The first quarter of 2020 has been a roller-coaster ride for Fiat. Total share recovered to 17 percent in January and February before falling to its historic low in March. (Dataforce calculates Fiat’s share at 10.4 percent, which is still a low for the brand.)

Salvatore Saladino of Dataforce said Fiat Chrysler Automobiles de-emphasized rental channel sales, which have lower margins, in March.
 
As a result of the shift, said Saladino, the Fiat brand share of long-term rentals dropped to 10 percent in March from 22 percent in February and 19 percent in January, he said. The share of sales to short-term rental companies was just 5.6 percent in March compared with 36 percent in January and 31 percent in February, he added.

Fiat’s European share outside of Italy has remained relatively steady, largely due to the popularity of the 500 minicar. It reached a peak of 3.4 percent in 2009 thanks to post-recession scrapping incentives that favored small cars. By 2011 it had fallen to 2.4 percent and has remained at that level ever since (it was 2.5 percent in 2019). 

The 500 found 140,530 buyers in Europe outside of Italy in 2019, accounting for 43 percent of the brand’s sales there, according to data from JATO Dynamics and UNRAE. 

Felipe Munoz, global automotive analyst at JATO, said that the 500 has no direct rival as a semi-premium minicar and is still very popular in many European countries, while the rest of Fiat’s range is older than the competition.

Fiat has dropped a number of low-volume models in the last three years without replacing them. Production of the Grande Punto, once a top-seller in Italy, was stopped in July 2018.

The passenger versions of the Qubo and Doblo small vans, both assembled in Turkey, were pulled from Italy at the end of 2019. The vans accounted for combined sales of just 11,000 units in 2018 and 9,100 in 2019. The Fiat 124 roadster, produced by Mazda in Japan, was also discontinued at the end last year.

Fiat’s passenger car range has shrunk to five nameplates: the 500 and Panda minicars, the 500X small crossover, the 500L small minivan and the Tipo compact range including a sedan, hatchback and station wagon. The youngest model is the Tipo, assembled in Turkey and launched in Europe at the end of 2015. The two most popular models both in Italy and in the rest of Europe, the 500 and Panda minicars, were launched in 2007 and 2012, respectively.

Munoz said Fiat also suffers from a weakness in SUVs, the only growing segments in Europe, where its only entry, the 500X, has to compete against wider ranges with offerings in various sub-segments. 

Fiat’s sole new model this year, the New 500 electric minicar, is expected to reach a volume of just 14,000 units this year. But even that could be optimistic: Production was supposed to start at the end of the first quarter at the Mirafiori factory near Turin, but coronavirus restrictions have kept the plant closed for five weeks and counting.