Reuters / September 02, 2003
LISBON (Reuters) - Competition is fiercer than ever in Europe's small car segment, but Fiat is betting its new Panda, launched on Tuesday, will tear its own chunk out of the market and help turn around the loss-making Italian carmaker.
The flat-backed mini is Fiat's first launch in years in the so-called A segment, where Asian models such as the Nissan Micra and tiny Kia have grabbed market share at Fiat's expense.
"You can't really call this an A segment car because it is bigger than most others, with touches of the multi-purpose vehicle, the off-the-road, the city car. It's very versatile," said Gianni Coda, head of the Fiat and Lancia business unit.
"We are aiming at a bigger client cluster than just segment A," he said, confirming a sales target of 70,000 Pandas in the rest of 2003 and 200,000 units in 2004 -- about a tenth of Fiat's sales. Some 45 percent of those should be sold in Italy.
The Panda is one of three new mass-market models hitting the road in the next few weeks, which Fiat hopes will reverse a sharp sales slump that dragged it to a record 4.3 billion-euro net loss last year.
"The new Panda is replacing two very old models, and Fiat has a strong distribution network in small cars. I expect they will have better success here than with the mid-sized model they tried," said Citigroup analyst John Lawson.
The Panda is the first Fiat marque launch since the mid-sized Stilo which came out in September 2001 and has since fallen far short of the firm's expectations.
Problems already have seeped into this year's launches. Fiat had planned to call the new small car "Gingo" but had to revert to the 23-year-old Panda name after Renault complained it sounded too like its own tiny Twingo and threatened to sue.
Fiat's historic strength is in small cars, including its iconic Cinquecento, but profit per unit is much lower on a model like the Panda -- which costs between 7,950 and 10,950 euros -- than on speedsters bearing its Alfa Romeo badge.
Fiat spent 600 million euros to develop the Panda and is squeezing as many cents as it can out of each car by building them in Poland where labor costs much less than in Italy.
It also plans to use the same base to produce diesel, 4x4, off-the-road and three-door versions of the Panda next year, which should push sales up to 220,000 in 2005. That is still way off the Polish plant's 300,000 unit capacity.
GM SAVINGS
Coda said more savings could be found with General Motors, which owns 10 percent of Fiat Auto and shares some parts buying and platform development with its Italian partner.
The two groups are working on a new B segment platform that will underpin the new Fiat Punto due in 2005 and the C segment platform to support the new mid-sized generation to replace the Fiat Stilo and GM's Opel Astra at the end of the decade.
"There is no reason why we couldn't do something similar in the A segment, work on the chassis, share pretty much everything under the bonnet," Coda told Reuters after the Panda launch.
Fiat also plans to pump more profit out of each sale by cutting the number of cars fed into the rental system or registered by dealers, so-called "zero-kilometer" cars.
"We want retail sales to make up 70 percent of our total this year, up from 67 percent last year, and we are in line with that target," Coda told Reuters.
He said Fiat had received 140,000 orders for a facelifted version of the Punto city car that went on sale in June, already speeding towards a 2003 sales target of 200,000 new Puntos.
The new Lancia Ypsilon, due to hit the showrooms this month, already has notched up 15,000 orders out of 40,000 Fiat hopes to sell in the rest of 2003. The third new model, the Punto-based multipurpose vehicle Idea, is due out in October.




LinkBack URL
About LinkBacks

Rispondi Citando

Segnalibri