Future ThoughtsPosted: April 12, 2011
I suppose any blog about Fiat needs at least one post about its recent history and immediate future. I’ve owned Fiat’s almost exclusively now for the past ten years including Fiat Stilo 1.6 (3dr) Fiat Stilo 2.4 Abarth (3dr) Fiat Panda 1.1 and Fiat Grande Punto 120T Sport. Also during that time an Alfa Romeo Sportwagon 1.8 lusso and a brief dalliance with Audi, albeit not a new one but a lovely 80 coupe. There have been other cars of Vauxhall and Ford variety but none grabbed me like the Fiats and Alfa did.
It’s hard to put my finger on exactly why, I suppose part of it comes down to that old cliché of ‘at least they’re not ten a penny’ and like all clichés or stereotypes, there is a little bit of truth in that. For example I could have bought a Mini but then they are EVERYWHERE, the 500 isn’t exactly a rare sight either but it’s not the default choice and something about that appeals to me.
So back to the topic of this post, I watched not too long ago, with intensity and worry how Fiat’s involvement with general Motors nearly led to disaster, saved at the eleventh hour by the sort of intense industrial negotiations, maneuvering and deal making that makes being interested in the business of the car world so fascinating. I can only imagine what went on in the boardrooms of Turin and Detroit. But the outcome led to a massive cash injection for Fiat that secured their immediate future.
Now I’m no forensic accountant but from what I can see from the quarterly reports, Fiat is back in profit. However, sales are on the slide especially in Europe, again they are not alone amongst manufacturers in suffering in the current climate, but the seeds of worry are beginning to germinate again. Why? Chrysler Group that’s why. I understand the economies of scale that having a stake in such a partner provides and how a ready-made dealer network has already paved the way for Fiat’s return to the US spearheaded by the 500, perhaps eventually Alfa will make it State-Side too? What I worry about and what will be a rollercoaster ride to watch unfold is the unimaginable task of juggling all those Chrysler brands, some of them very damaged in the worst way a brand can be damaged, image.
That’s why the wolves are circling in the shape of VAG and specifically Volkswagen, to pick up the carcass of Alfa Romeo if this all goes belly up. Now VW could do great things with Alfa but given time so could Fiat group. Here’s the thing though, how much time can Fiat have to do what needs to be done to make Alfa strong again? The Giulietta’s a start and from what I’ve read people only have good things to say about it. Alfa isn’t really the damaged brand when all’s said and done, it’s just neglected and that’s different. The real damaged goods that Fiat are now saddled with are the Chrysler brands in Europe including Chrysler itself and Dodge. Rebranding Chryslers as Lancias really is an almighty game of smoke and mirrors, so why pursue it? It appears that Fiat will have the fortune of inheriting some Dodge hand me downs arriving in the guise of the Fiat Freemont Nee Dodge Journey mini-van; it’s quite a handsome looking thing in Fiat guise in a utilitarian kind of way. Will it sell though? Hmmmmmm….
I can see some hope in Jeep and I think if Fiat wanted in on the 4×4 world this would have been the direction to go in, maybe this is in store for the future? But whatever, all this is akin to juggling with fire, things will catch alight and burn, lets just hope a stronger Fiat emerges from the ashes.
I’ve posted a press release that begins to point to Jeep’s immediate next steps under the group umbrella and just how difficult this will be. Honestly, the marketing folks come up with some fluff. Having said that, if anyone wants to give me a job, I won’t say no! I sincerely hope the purchase of Chrysler now a 30% stake turns out well but there will be some worrying along the way, if only by me!