Fiat’s recovery hinges on being able to double sales in 2019
Fiat Chrysler Automobiles will pay special attention to rejuvenating the somewhat sidelined Alfa Romeo brand
Fiat Chrysler Automobiles (FCA) SA must more than double sales in coming months to recover from its long-running slump, CEO Graham Eagle said on Wednesday.
The company, whose brands include Fiat, Alfa Romeo and Jeep, has seen sales plummet in recent years — the result, said Eagle, of overpricing, poor product planning, diminishing brand value and a complicated management structure.
The last of these, exemplified by the creation of two separate local marketing companies, was fixed midyear by their consolidation into the single FCA SA. An all-new management team, headed by former Honda SA marketing head Eagle, was appointed in July. One of their first decisions was to disband the old FCA marketing team and bring in new leadership.
Apart from the three headline brands, FCA SA also markets Abarth cars and Fiat Professional commercial vehicles. In future, local dealers will sell all five, instead of picking and choosing, as some have done. The historic link between Chrysler and German motor company Daimler, which allowed local Mercedes-Benz dealers to sell Jeeps in SA, is also ending.
Two other brands that used to be sold by FCA SA — Dodge and Chrysler — have officially been withdrawn from SA because of poor sales. However, their nameplates will remain on dealerships as long as their vehicles are being serviced.
FCA SA used to sell well over 300 vehicles each month. Now the average has fallen below 140. Eagle says: “I think we can get back to 300 within a few months; then we should aim for 400.”
To do that, the company will have to plug gaps in its various vehicle line-ups. Eagle said several new products would be launched in 2019. Much of the emphasis would be on sports utility vehicles, which account for nearly one-third of all South African new-car sales.
With financial support help from FCA SA, which is wholly owned by the global FCA group, dealers would be able to offer more attractive pricing than in the past. “We have not been as competitive as we should have been,” said Eagle.
Special attention would be paid to the Alfa Romeo brand, which had lost some of its old magic. “We have not been treating it as the prestige brand it is,” said Eagle. “Alfa customers want to be treated differently and it’s up to us to make sure they are.”
FCA is not the only company yearning for sales growth. After a brief flurry in 2017 following three years of decline, the local new-vehicle market has ground to a halt again in 2018. Marketers are hoping for slight growth in 2019 but no one is betting their house on it.