Fiat Chrysler Automobiles (FCA) is poised for a European market relaunch that will see the Italian brand abandon its mass market positioning and Jeep exploiting the booming market for SUVs of all sizes.
The first fruits of Fiat’s new brand positioning was the 500X compact SUV, accompanied by its Jeep sister car, the Renegade. Autocar can also reveal that the two brands are working on a pair of larger SUV models based on the same high-end platform.
At the recent Geneva motor show, FCA boss Sergio Marchionne said Fiat would no longer attempt to be a “mass-market brand” and would not attempt to offer a “full range” of models. He added that Fiat would “focus on what it does best”.
In extracting the best from what remains of the Fiat brand - combined Fiat and Abarth sales reached a modest 600,000 units last year - Marchionne and his team have devised a four-pronged plan.
The biggest growth areas in the European market are the SUV and premium sectors, probably followed by smart city cars and budget models.
Fiat is already very well placed in the market for characterful small cars with the 500 line-up. The 500 hatchback and the bigger 500L MPV are both segment leaders in Europe, and Fiat’s main challenge will be to maintain and progress the success of the 500 family.
Fiat will attack the SUV sector with the new 500X and the upcoming Nissan Qashqai-sized SUV. These models will be made profitable because they will share components with and be built alongside a pair of Jeep sister cars.
Additionally, the sophisticated platform underpinning the new 500X and Jeep Renegade can be scaled for use on the bigger Fiat and Jeep models.
Farther down the line, Fiat and Jeep may launch a truly baby SUV into the European market. The model would be around the size of a supermini, according to global Jeep boss Mike Manley. The move could result in today’s Fiat Panda Cross being replaced by a pair of Fiat and Jeep SUV models.
With the small and medium SUV market covered by Fiat and Jeep, Marchionne’s plan then takes an unexpected turn into a new niche.
Although Europe’s Volkswagen Golf and Ford Focus-sized C-segment accounts for a substantial 29% of the new market, profits are wafer thin, if they exist at all.Most analysts think the situation is caused by a combination of intense competition, high labour costs and increasingly generous standard specifications as the mainstream brands chase the sector-leading Golf.