Fiat to exit city-car segment after merger

Fiat to exit city-car segment

Italian carmaker Fiat is, bewilderingly, preparing to abandon the small, city car market that has kept it alive for the past 30 years.

Just merged with France’s PSA Groupe, FCA’s Fiat is preparing to stick the knife into its baby cars because they cost too much to develop, no longer deliver CO² advantages and deliver small profits.

Late last week Fiat Chrysler Automobiles and the Peugeot owner, Groupe PSA, merged  to create the world’s fourth-biggest carmaker. The Italian and French companies said the 50/50 tie-up would create a company with annual vehicle sales of 8.7-million

"In the near future you will see us refocus on this higher-volume, higher-margin segment, and that will involve a move away from the minicar segment,” FCA CEO Mike Manley told analysts last week.

It would be an astonishing move from Fiat, with more than half of its total European sales coming from city cars like the Panda and the 500. Add in the Lancia Ypsilon (which is built on the Panda’s platform) and it pushes the small-car split even higher, to about 320,000 cars so far this year.

The Panda and the 500 lock out the top two spots in the minicar segment, with a combined third of the segment’s 604,000 total.

Each of them sells about double the third most popular car, the Toyota Aygo.

Abandoning the segment would leave the Aygo in the lead with just over 51,000 sales in the first half of this year, from Renault’s Twingo and Volkswagen’s expensive Up.

Like Fiat, Volkswagen has confirmed plans to kill off the Up at the end of its production cycle.

Fiat’s PSA partners have two players in the segment, with the Peugeot 108 in eighth place at 31,349 for the first half of the year and the Citroën C1 in tenth with just 28,993 sales.

Frighteningly, Fiat doesn’t have a single car in the top 10 for the small car segment (the next segment upstream), which is dominated by the Renault Clio (185,517 sales) and the Volkswagen Polo (146,344).

Peugeot’s 208 ranked fourth in the segment in the first half of the year, with 124,730 sales, while Citroën’s small offering, the C3, languished in seventh with 118,799.

Both the much-loved, five-door Panda and the more style-oriented three-door 500 are getting old. It has had a facelift, but it was launched 12 years ago. Essentially a stylish body on an upgraded Panda chassis, the 500’s sales in Europe finally began to fall this year, dropping 9% to 100,150 in the first half of the year.

PSA, which controls Peugeot, Citroen and DS, is not fond of small city cars and its CEO Carlos Tavares is about to become the CEO of the merged PSA-FCA entity. Manley’s future is uncertain in the new group.

Moving Fiat to the B segment would lean heavily on PSA architecture, because FCA doesn’t have any.

PSA, meanwhile, has kicked goals with the latest generation of its B segment hatches and, especially, crossovers. It's compact-segment offering, the 308, ranks fourth at 78,732 sales, though Citroën isn’t in the top 10.

- Michael Taylor

Tesla cars now recognise traffic cones

Tesla has rolled out a software update to its Autopilot system that incorporates traffic cones into the driving visualisation displayed on the touchscreen, Electrek reported over the weekend.

As of this weekend, Tesla's Autopilot can not only recognise traffic cones, but the software can incorporate them and their placement with respect to the vehicle on the digital display.

Previously, the driving visualisation tool — a real-time rendering of the vehicle's surroundings displayed on the central touchscreen in the cabin — could only show other vehicles and lane divisions. Now, vehicles with the full self-driving feature can identify cones, display them on the screen and optionally automatically avoid them.

When Navigate on Autopilot is activated, the vehicle will either suggest a possible lane change to the driver or initiate one, depending on the car's predetermined settings.

This update to the Autopilot driving visualisation tool follows a major one that rolled out just a few months ago, allowing drivers to zoom in and out on the rendering, as well as rotate the image.

While this addition does not allow the driver to wholly rely on Autopilot to drive them from place to place, it demonstrates the software's ability to detect and react not just to other cars, but to objects and other obstructions on the road.

- AFP Relaxnews

Ferrari looks to capitalise on brand name as it promises faster growth

Strong sales of Ferrari's Portofino and 812 Superfast models enabled the Italian luxury carmaker to raise its outlook on Monday, with a new brand strategy promising even more growth.

Ferrari's Milan-listed shares rose as much as 7.4% to an all-time high of €155.15 after it reported "solid" third quarter results and signalled a strong year ahead.

The "Cavallino Rampante" or "Prancing Horse" launched a plan to enhance its brand through new apparel and accessory collections, entertainment offers, and luxury products and services for clients. They include an agreement with Italian fashion house Giorgio Armani and the opening of a restaurant with star chef Massimo Bottura in the group's hometown of Maranello in northern Italy.

Ferrari expects the new brand initiative to represent around 10% of the group's profitability in the next seven to 10 years, in what CEO Louis Camilleri described as an "ambitious but realistic target".

"It is our intention to increase the size of the cake and our share of the cake," he told analysts in an earnings call, referring to the group's bid to expand revenues outside of selling cars.

The new branding strategy builds on the group's aggressive roll-out of new premium models.

Ferrari said core earnings would be about €1.27bn (R20.8bn) for the full year.

Ferrari will present its latest new model in Rome next week, taking the total to five this year, including the SF90 Stradale, its first hybrid car in series-production.

To support Ferrari's growth and profitability Camilleri's strategy plan from September last year promised to launch 15 new models between 2019 and 2022.

Ferrari, known for its racing pedigree and roaring combustion engines, is also considering a full-electric model, though that will not hit the road before 2023.

"We're taking our time to ensure that it will be a true Ferrari DNA car," Camilleri said.

- Reuters