The future of Italian brands Fiat and Alfa Romeo will become the responsibility of Fiat-Chrysler Group Australia come Tuesday (May 1), with the group taking over from long time distributors Ateco Automotive. So what exactly does the change entail for two of the world’s best known automotive manufacturers?
Speaking with CarAdvice at last week’s Beijing motor show, Fiat-Chrysler Asia Pacific chief operating officer of Mike Manley was optimistic on the improving opportunity for the two brands.
“I think there’s opportunity for us on Fiat with the collective networks to help both Fiat brand as well as Jeep brand in Australia,” Manley said.
The factory-backed operation is likely to keep Fiat a niche business for the time being, but expand the Fiat 500 range to include the Fiat 500L and additional variants as they become available.
Speaking about Alfa Romeo, Manley conceded the brand requires an expanded product portfolio in order to better compete on a global level.
“The brand strength and recognition of Alfa Romeo means that it has great opportunity in international markets, but I absolutely agree that you have to get the product portfolio right to make that happen and that would mean an expansion to the product portfolio that’s existing today.”
He said it was too early to say whether or not either brand's market share would improve under Chrysler Australia, although given the effort undertaken to secure distribution rights, it seems only a matter of time before the two brands attract the additional management attention they deserve.
“If it was not an important part of our strategy, why would have ever been interested in taking distribution back? That action alone shows you that it’s an important part of our future,” Manley said.
Asked about the potential for a price reduction for Fiat and Alfa Romeo to better compete with other European brands, Manley, who is also the CEO of Jeep worldwide, pointed out the success Jeep has had in the Australian market over the past 18 months following a decision to allow the local management team to set pricing and product structures.
“One thing that I’ve always told my markets on the Chrysler side is that you as a market have to be the one that positions the vehicles in the appropriate place, ignoring what they cost… If it’s not market driven, if it comes from the industrial side of the business up, you usually end up with the vehicles positioned in the wrong place and in the wrong market.”
Manley believes Fiat’s future in Australia is promising, as it becomes a more significant right-hand-drive market on the global scale.
“From the Fiat perspective, right-hand drive is important and will continue to be important and then a big contributor, potentially in terms of volume, will come from Australia, so I think you put those two things together and you can indicate that Fiat has a strong future in Australia.”
Also at the Beijing Motor Show was Fiat Asia-Pacific head Massimo Roserba, who confirmed lower-specification 500s would join the local line-up in the near future. He conceded that in the short to medium term, Fiat would remain a niche brand in Australia but that it would become profitable.
The comparison can be drawn between Fiat and Mini on this strategy. Both are iconic brands that bet their entire existence on one model (500 and Cooper, respectively). In the case of the 500, the 500L and a potential 500 SUV model is on the way, much like how Mini has expanded the Cooper range with the Clubman, Countryman, Roadster and Coupe.
The most obvious change to Fiat and Alfa Romeo may indeed come at a pricing level, with both brands likely to restructure their positioning in the local market. Not necessarily by dropping prices, but by adding variants.
What would you like to see change with Fiat and Alfa Romeo operations in Australia?