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Why the boss of Fiat is choking Fiat

"We need to be unemotional. Fiat will play a less relevant role in Europe", says Marchionne

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Fiat, once one of the most interesting and biggest-selling car brands in Europe, is declining fast. Yet the Fiat Chrysler Group boss, Sergio Marchionne, doesn’t think it’s worth doing much about that. He told Top Gear the investment is better put elsewhere.

“We made significant efforts in Jeep, and in the development of Alfa Romeo and Maserati. That’s a better use of our resources.” He turns to the Group’s European boss Alfredo Altavilla: “Sorry Alfredo, maybe that sounds like a bad answer.”

He says he thinks the 500, 500X and Panda are worth pursuing. “I’m less enamoured with the Tipo. We have to be careful in deploying large amounts of capital in chasing an overcrowded market.” You might reply that the problem with the Tipo was that they haven’t deployed enough effort: it’s a pretty ropey car.

He doesn’t even mention the prehistoric Punto, which has now been pulled from the UK but limps on in Italy. Almost inconceivably given the company pretty well invented the category with the 127 in 1971, there is now no Fiat supermini here.

Marchionne’s basic thesis is that he won’t try to buck a changing market. “All our brands develop along with the market.” The growth in SUVs and pickup trucks has benefitted Jeep and Ram in the US. “We’ve been discussing SUVs in Europe. Your guess is as good as mine as to where this will grow to, but we have to make an estimate and we’re saying 40 per cent of the European market will soon be SUVs. It’s nonsensical to morph Fiat onto that when we have Jeep.

“I hated restricting Lancia. I own and drive an Integrale. But we need to be unemotional. Fiat will play a less relevant role in Europe.” He does add, though, that in Latin America it’s still worth pursuing.

Undermining his logic on moving the investment to Jeep and Alfa, Alfa’s growth is still hesitant. In 2014 he predicted that Alfa would grow to 400,000 cars a year by 2018. That has proved spectacularly optimistic. “My mistake,” he says now, going on to admit it’s taking much longer than the company expected to build Alfa’s sales, despite the fact we agree the Giulia and Stelvio are great cars, “especially the Quadrifoglio”.

Alfa’s sales prediction for this year was to do about half the number of cars, model for model, as BMW or Audi. From pretty much a standing start, that was always going to be ambitious.

But Marchionne now says: “It has been a legitimate resurrection of Alfa. We had to get a technical infrastructure for Alfa and Maserati to play against the Germans.”

More Alfas will be launched. They include another SUV and saloon. Also a replacement for the Giulietta and the ridiculously elderly MiTo – but not directly since three-door cars are dying.

He says Alfa now has credibility again. “Whether or not we hit 400,000, the real question is if the Alfa-Maserati package works. We’re now sitting in a technical space that’s reserved for the few. The resurrection is done. Let the commercial guys get to work now.”

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