Fiat takes €9 billion European gamble

Italian car maker’s plans include dropping Punto brand and introducing premium Maserati Levante. Plus: Mercedes sales rise; Toyota’s new-generation Supra

The Maserati Ghibli S Q4 at the  Guangzhou 2013 Auto Show in China. Photograph: Kin Cheung/AP

The Maserati Ghibli S Q4 at the Guangzhou 2013 Auto Show in China. Photograph: Kin Cheung/AP

Wed, Dec 11, 2013, 03:00

Fiat is continuing to play its product plans close to its chest. At the last report it will be April before an official announcement is made regarding the supposedly 20 new models the firm will produce. Most of those 20, including eight Alfa Romeos, are expected to be built in Italy as Fiat tries to reorganise its manufacturing capacity so that high-end, high-profit cars will be made at home.

The Punto, despite once being a European best-seller, will be dropped as part of the €9 billion investment in new models lines. It will be replaced by a five-door version of the next generation 500, which will continue to be built at Fiat’s factory in Poland.

Meanwhile, the once-mighty Mirafiori plant in Turin is due to switch from mass-market to upmarket. In the 1970s, the factory employed as many as 50,000 people and turned out 600,000 cars a year. Now, that figure is around 5,000 employees and as few as 20,000 cars annually. The firm is hoping that Mirafiori’s future may be secured by the arrival of the premium Maserati Levante. An upmarket SUV, with Jeep Grand Cherokee underpinnings, the Levante could help to cement Maserati’s recent success. So far this year Maserati has sold 23,000 cars – four times what it shifted in 2012.

The Fiat brand itself will be bifurcated into two product streams; funky cars with lots of expensive options based around the trendy 500 and a more practical, affordable range based around the Panda.

While Fiat’s market share has tumbled to an astonishing low from its once untouchable dominance of the European market, it has actually weathered the storms of recession better than most European car makers, losing “only” €2 billion since 2011, with losses of around €304 million this year. That puts it in a stronger position than PSA Peugeot Citroen or Opel, but Fiat boss Sergio Marchionne will be impatient to get the Italian giant back on its financial feet as he lines up a complete merger of Fiat with its American partners in Chrysler.

A resurgence for Fiat is also being seen as a political necessity by the Italian government. It is hoped a resurgence now could help stabilise and rebuild Italy’s shattered economy.

Toyota weighs up options for new LF-A or Supra

Toyota has confirmed that it will reveal a concept for a new generation Supra sports car at the Detroit motor show in January. It is also considering a replacement for the Lexus LF-A supercar, based on the LF-LC concept. Combining the development of both cars would seem to make production more likely. Toyota’s Kazuo Ohara, president of sales and marketing in the firm’s US division, recently described a new Supra as “one of the options we have” before going on to say that there may be “better news” on that subject in the offing.

The Supra is something of a talismanic vehicle for Toyota, probably more so in the US market than here, but there are some die-hard fans of the one-time hottest Toyota on this side of the Atlantic.

If Toyota decides to siamese the development of both a Lexus and Toyota-badged performance model it would not be the first time; the 1993 Supra A80 model was co-developed with the contemporary Lexus Soarer coupe.

A new Supra has not been spoken of since Toyota showed the FT-HS concept back in 2007, but it now has a more-or-less production-ready drivetrain prepared for such a car.

This year Toyota showed a concept Yaris Hybrid R using components from Toyota’s TS030 Le Mans racer. It’s also thought that Honda’s new NSX hybrid supercar, due to arrive on the market by 2015, is spurring its arch-rival on to make a new Supra a reality.

Rise in Mercedes sales but incentives already in use

Mercedes has posted an 11 per cent global sales rise, chiefly attributed to increasing demand in both China and the US for cars such as the CLA four-door coupe and the recently revised E-Class.

The rise in US sales has actually put Mercedes ahead of BMW in American sales for the first time in three years. Mercedes is now around 7,000 unit sales ahead of its Bavarian rival, and this despite CEO Dieter Zetsche saying back in July that he expected BMW would still be ahead at year’s end.

Globally, Mercedes posted just over 133,000 cars sold in November, bringing its year to date sales up to 1.3 million cars. “We have already achieved last year’s total sales volume and we are the fastest growing premium brand since the beginning of the year,” Mercedes sales and marketing chief Ola Kaellenius said.

Some of those sales are being propped up by the generous use of after-sales incentives, however. According to Automotive News, Mercedes’ US dealers are being allowed to spend up to $1,000 (for CLA customers) and $2,500 (for S-Class customers) both to woo and placate buyers if things go wrong. It has been reported that one S-Class owner who came in complaining of an engine check light was given a voucher for dinner at an expensive restaurant. Another complained that his sunglasses didn’t fit in the overhead pouch and so was gifted a $150 pair of Ray-Bans.

Steve Cannon, COE of Mercedes-Benz USA, has confirmed such a programme is in place, and is designed to rectify small issues for customers not normally covered by warranty. It is expected to cost Mercedes many millions to keep running – especially now that the word is out.