Sergio Marchionne, the chief executive Fiat Chrysler decided to oversee a strategic plan to boost its sales, innovates its products, and expands its presence in the global market, especially in Asia. Although Fiat owns many famous European brands such as Alfa-Romeo, Maserati, and Ferrari, the American side of the company, which is Chrysler mainly, is projected of most of the growth. For example, Jeep’s sale is forecast to grow from last year’s 731,565 to 1,900,000 by 2018. Marchionne’s new plan is to have something for every model of its brands. For example, Chrysler is giving up its idea of being luxurious and focus on mainstream vehicles. Dodge will concentrate on performance cars.
In Europe, Marchionne is looking forward to huge growth for Alfa-Romeo and Maserati. He also has plans for Alfa’s return in America; the brand would bring eight new Alfa-Romeos in late 2015. Mr. Marchionne has a great plan for Fiat Chrysler. However, Fiat is having a problem of losing investors’ confidence. Fiat has missed sales and profit targets back in the days and it is still carrying about 30 billion euros in debt. So although the return of Alfa in the States looks very promising, there is still a question mark over how Fiat Chrysler is going to achieve its huge goal by 2018.
Source: Online WSJ
As I mentioned in my blog couple days ago, I think that this goal is too optimistic and almost unrealistic. The company would have to create a massive and successful advertisement campaign to bring Alfa Romeo back, and hope that any of the new models flops. It is true that the fast growing Chinese market will be a great place to expand their sales and reach this goal, but all the firms worldwide will be aiming the same, making things more difficult for Fiat-Chrysler.
I think that huge growth through the Alfa-Romeo brand and the Maserati is unrealistic. Although they represent cars many people would love to have, Maseratis and Alfa-Romeo are extreme luxury vehicles, that realistically can’t be used as an everyday vehicle. Also, since they are such expensive cars, Alfa-Romeo and Maserati only appeal to a small portion of the consumer market, which is the extremely wealthy who are looking for an extra car to be used more like a toy rather then a practical vehicle. That being said, I think Marchionne should exploit Jeep for all it’s worth. The brand name is so distinguishable and Jeep produces a very distinct type of car that most companies do not have in their portfolio. Marchionne should push advertising campaigns in emerging markets as well as the U.S. as a way to continue the growth of global Jeep sales worldwide and put Chrysler back on track.
As per Mayol, read previous posts before doing your own.
So most of the growth is … Jeep in Europe and Asia? How about Brazil, where Fiat is (was?) the market leader?
To what extent do luxury brands matter to Fiat? Do they help its image? If not, then they need to stand on their own feet (float on their own bottom, similar images) – are they profitable in and of themselves? The Agnelli family may be committed to these brands (or maybe not) – how do they matter?