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November 09, 2021 05:34 AM

Lancia CEO outlines Europe expansion plans

Road map includes 3 new models and move to agency sales, CEO Luca Napolitano says

Luca Ciferri
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    Luca Napolitano Lancia CEO 2021 web

    "We see Lancia as humble and determined, not weak," CEO Luca Napolitano said of the Stellantis premium brand.

    TURIN -- Lancia will return to selling cars outside of Italy in 2024 with three new models, including the fifth generation of the Ypsilon small car with a full-electric version, a flagship compact crossover and a compact hatchback, CEO Luca Napolitano said.

    The near-premium brand retreated to the Italian domestic market in 2017, and since then has sold only the fourth-generation Ypsilon, which is the longest model on the Fiat Chrysler Automobiles' Mini platform that is also used by the Fiat 500 and Panda minicars. The next generation will move to a Stellantis small car platform.

    Napolitano, who was appointed head of Lancia in January after the merger of FCA and PSA Group to create Stellantis, told Automotive News Europe in an interview that Europe-wide sales would start with Austria, Belgium, France, Germany and Spain in 2024, with UK sales expected to begin at a later date.

    Lancia has sold about 3 million Ypsilons since the nameplate debuted as the Y10 in 1985. The next generation will be the first to have a full-electric powertrain as well as the last to have an internal combustion engine (with a 48-volt mild hybrid). Future models will be EV-only, Napolitano said. 

    Lancia will then launch a flagship model, a compact crossover set to arrive in 2026, potentially to be called Aurelia, followed by a compact hatchback in 2028 that will revive the Delta name.

    The design of the new models is being supervised by Jean-Pierre Ploue, the longtime design lieutenant of Stellantis CEO Carlos Tavares.

    Tavares has grouped Lancia together with Alfa Romeo and DS in the group’s premium cluster of brands. 

    Napolitano says he enjoys a very positive cooperation with Alfa Romeo CEO Jean-Philippe Imparato and DS CEO Beatrice Foucher, as they look at all possible synergies to save on investments and production cost, but at the same time seek to maximize the differentiation in the products.

    “Lancia will deliver an understated, clean Italian elegance, with soft surfaces and great quality,” Napolitano said.

    Lancia sold 35,272 Ypsilon minicars, shown, in Italy from January to September, 20 percent more than in the same period the year before. 

    Brand repositioning

    Napolitano wants to attract a different kind of buyer for Lancia. Currently, two thirds of buyers are women, with an average age of 45 and with no children in their household. He sees future models as drawing buyers with an average age of 55, but with at least one child still at home, and evenly split between male and female.

    " 'Progressive cultural influencer' is how we define Lancia’s future customer," Napolitano said. 

    This urban customer is ahead of the pack, does not accept the status quo and wants to drive change, so is naturally attracted by electric vehicles and internet sales, Napolitano said.

    Lancia sees affinities between its future target customer and current customers of brands such as Tesla and Volvo, as well as buyers of Mercedes-Benz’s EQ full-electric models, Napolitano said.

    Looking beyond Italy

    Three new models in four years will drive Lancia's expansion out of Italy, where it has sold only one model since 2017.

    Ypsilon (2024): 5-door small hatchback below 4 meters long, with a 48-volt mild-hybrid gasoline and/or full-electric drivetrain

    Aurelia (2026): 5-door compact SUV/crossover, 4.6 meters long, full-electric only

    Delta (2028): 5-door compact hatchback, 4.3 meters long, full-electric only
     

    From franchises to retail agents

    Lancia's sales model will evolve, too, he said.

    About half of the brand's target customers will opt for internet sales in the second part of this decade, Napolitano said, reducing the number and the size of needed showrooms.

    "I envision about 100 showrooms in about 60 European cities," he said, adding that they will not be corners in another brand's showrooms but dedicated spaces, despite a small footprint of 80 to 140 square meters.

    As with the other brands in Stellantis' premium cluster, Lancia will move to a retail agent distribution model starting on June 1, 2023.

    With the traditional franchise model, the dealer owns the inventory of vehicles and then sells them to customers. Franchised dealers sustain higher costs – including paying for the showroom’s corporate identity – which are compensated by higher margins.

    Under the agency model, the automaker keeps the inventory until the vehicle is sold by the retail agent to a final customer, private or fleet. Retail agents receive a smaller commission, but their costs are lower, given that inventory financing and corporate identity are the responsibility of the automaker.

    Napolitano declined to elaborate on the commission structure to be offered to Lancia retail agents, saying that "productive discussions are still ongoing." But he said the brand will have a simplified product offering, with preset packages of options to streamline production and inventory.

    Tavares has not offered sales or profit targets for Lancia; Stellantis is expected to unveil a detailed plan for its 14 brands in early 2022.

    But in a nutshell, Napolitano said he sees Lancia as "humble but determined, not weak."

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