It's going to be a busy 12 months for Paul Hunt. The recently-installed managing director of Fiat Chrysler Automobiles Ireland Ltd is an experienced hand in the Irish motor industry, with stints at both Citroen and Volkswagen Group behind him, but there's little doubt of the challenge he faces in trying to inject some life back into Fiat's sales performance in this country.
Some 15 years ago, when new sales hit a peak of 247,000 cars in one year, Fiat's Punto was the best-selling car in the country and the Alfa Romeo 156 enjoyed a one per cent market share all by itself.
Now, Fiat’s market share has plummeted to just a half of one per cent, and Alfa Romeo struggles to break into double-figure sales. Worse, the Jeep brand – enjoying massive success in the US and on the continent – has failed to chime with Irish buyers and its sales figures are similar to those of Alfa.
"When you look at our sales, 50 per cent of our volume comes from 500, which represents, in segment terms, three per cent of the Irish market" Hunt told The Irish Times. "So when you look at it like that, and we'll do nearly 400 units of 500 this year, we do well in that segment, especially in a market where three-door cars tend not to do so well.
"There are many brands that would love to have our performance with 500. 500x 500L are, I believe, possibly the best kept secrets in the Irish car market, The 500x in particular should be doing far better. When we look at its performance across Europe, along with the Jeep Renegade, both cars have impressive sales. In Ireland, because of our overall brand awareness issues, that car has suffered. So we would hope that when Tipo arrives, it will provide us with an opportunity to introduce customers again to the broader Fiat range, and I think 500x will be the biggest beneficiary of that."
Tipo saloon
The Tipo is Fiat’s return to the conventional family-car hatchback market, one that it has not occupied since the old Bravo slunk off back to Turin, bereft of sales. It was a dark time for Fiat for, while the company was sufficiently cash-rich to buy out Chrysler and build a gigantic global empire, Fiat chief executive officer Sergio Marchionne’s reaction to the global recession in 2009 was to row back dramatically on new product development, leaving Fiat to struggle on with older models such as the 500 and Panda.
New introductions such as the 500L MPV and 500x crossover have also failed to set the market alight, but Fiat’s strategy for making the Tipo a success is a succinct one – stack it high and sell it cheap.
“When you pitch Tipo against the likes of Golf, Focus, Auris etc, they start at around the €19,0000 mark, but people don’t buy the entry-level model, they buy one for €23,000 or €24,000,” says Hunt. “So we’re paying particular attention to the price point, to the equipment. It isn’t about the entry level having a low optical price point and actually our highest-spec model will be the best value of all the Tipo range, especially given its equipment levels. We would hope to be €1,000 if not lower than the entry-level price points of most of the competition. And we won’t be relying on big scrappage or discount campaigns to sell the car. It will sell on value and price.”
Right-hand drive
Crucially, Fiat Ireland has managed to convince Fiat to make the new Tipo saloon in right-hand drive, which was a struggle as the much larger UK market isn’t bothering with the four-door, and instead will just sell the hatchback and estate. “It was a big ask to get right-hand drive for the Tipo sedan, and we had to stand over it, but our product guys really believe in it,” says Hunt.
Since we spoke, Fiat Ireland has announced prices and specifications for the Tipo which, by starting at €17,995, will significantly undercut all of its major five-door hatchback competition. Standard equipment on the basic Pop model is generous, including air conditioning, remote central locking, front and rear electric windows, body-coloured door mirrors with electric adjustment, six airbags, chrome door handles, split rear seats, a front seat centre arm rest, a full size spare wheel, USB and Bluetooth connectivity with steering wheel remote controls.
For a limited time after launch, Fiat will offer Irish buyers the chance to buy the mid-ranking Easy trim for the same price as the cheapest Pop model, which will boost standard equipment to include a 5in Uconnect touchscreen infotainment system, a leather-trimmed steering wheel and gear knob, LED daytime running lights, 16in alloy wheels, front fog lights, rear parking sensors and cruise control. Range topping Lounge models will kick off at an extra €1,250.
The Tipo range arrives in Ireland initially with five-door hatchback and five-door estate models, while the four-door saloon will arrive in January. Engines include 1.3 and 1.6 turbo diesels and 1.4 and 1.4 Turbo petrol versions with Co2 emissions starting from 98g/km.
Strategy
Even with four-doors, pleasant styling and a tempting price tag, the Tipo will be on shaky ground initially. Irish buyers have quite simply deserted Fiat since its heyday, and aside from that solid sales performance of the 500, it’s going to be a challenge to get the attention of buyers who’ve long since wandered away to Skoda, Hyundai and Toyota. “For us, we have to be very clear in terms of our strategy, in terms of what we stand for. As you’ve probably seen from other markets, the Tipo is a very good product, nicely designed, and it’s a good value proposition as well,” says Hunt.
“We would hope to have strong headlines from our price position as well and the value proposition from the amount of equipment we’re going to put in the car. We would hope that the price point would give us a good reaction, and generate us some interest in the Fiat brand that may have been lacking recently. But you always have a danger when you’re down to around the 20th position in sales terms. We don’t have the media spend of some of the bigger players, so we have to box a bit clever and really work on getting the cars physically out to people to try.
“I look at a brand such as Nissan: when it launched the Pulsar, they would have been in quite a similar situation but that car was hugely successful in its first year. When you look at their overall performance in that year . . . they had the biggest growth of any manufacturer, so I take a lot of confidence from that.”
Alfa revival
Bigger challenges remain, not least the attempt to breathe fresh life into Alfa Romeo with the new Giulia saloon (which arrives this side of Christmas) and next year’s Stelvio SUV.
“Alfa comes back to my point of being a little bit different. We have to get customers to drive our products. We have to get our cars out there a lot more. The shopping centre outlet idea will be crucial for Alfa, for Giulia in particular,” says Hunt.
“You’ve got to drive it to see what it’s like and understand what it means to be an Alfa. Clearly BMW, Audi, Mercedes have done great business over the past few years, especially Audi and BMW, but there’s a hope and an expectation that some of those customers want to try something different. And we’ve been getting regular requests for information on the car. Requests for pricing, [asking] when’s it coming.
“You can feel that there’s a genuine level of excitement for the car. We have a challenge there, we have to try and compete with those very strong brands, but we will be working with our dealers, with our marketing approaches, to get bums on seats and get people to understand what the Giulia is about, what Alfa is about. I believe that it’s going to be a transformative model for Alfa in Ireland. The fleet market side of the equation is about driving a desire for the car, as well as doing things like assuring on the aftersales market. It’s going to be a multi-layered approach, from the car to the marketing to the dealer network.”
Dealer network
Incidentally, Hunt isn’t keen on a dramatic expansion of the dealer network in Ireland. He’s one of many convinced that the old showroom-in-every-town model just doesn’t work any more and feels that it’s more important to have a sustainable network with solidly profitable dealers, although he wants to plug coverage gaps in areas such as Galway and the midlands.
“There’s a varying opinion on why Irish buyers switched off Fiat. For me it’s all about the product and having products that suited the Irish market. SUVs, yes they’ve grown massively and Irish customers picked up on SUVs rather quicker than in some markets. But the C-segment car is still a very big segment, and that’s the major reason people drifted away.
“There is a perception issue in terms of how people view the product, and we need to try and take away that thought that our quality and our reliability isn’t as good as it should be, because clearly recent research and surveys have shown that there have been some real big improvements. The one thing that our dealers kept saying to me when I went to visit them for the first time was ‘our products have never been as good’.”
