Fiat Planning a Range Splitting Strategy to Retake European Market

In all honesty, a true Fiat comeback was long overdue, the Italian brand lately relying too heavily on the small 500 model both as an image vector and for driving the sales. Soon, though, the 500 will be spearheading only one of the two future wings of the Fiat range.
Fiat range segregation 1 photo
According to research, two of the most lucrative segments of the European market are near-premium small and compact cars (think what Mazda or Volkswagen are doing) and high-value budget cars (Dacia quickly springs to mind, but Fiat is probably thinking something closer to Skoda).

Fiat's strategy relies on splitting the range into two arms they've identified as "Rational" and "Emotional". At a first glance, this sounds like a clever trick for being able to sell more pretentious vehicles as well as budget cars without each compromising the other's credibility. It's somewhat similar to what Citroën did with its DS sub-brand, without actually creating a different identity.

The "Emotional" side will mostly be made up of the ever-expanding 500 range -- which is expected to receive a larger five-door hatchback soon based on the same platform as 500X -- joined by the upcoming Fiat 124 Spider, a roadster sharing its underpinnings with the Mazda MX-5.

Moving on to the "Rational" branch and we find the Panda workhorse due to be replaced in 2018, with the more recent Aegea budget saloon sitting beside it. A new B-segment model is going to be launched next year while the Aegea should also expand its range with hatchback and estate versions.
Positioning, positioning, positioning
Fiat is emphasizing the "high-value" part in their "high-value budget" characterization of the "Rational" arm, saying the cars will not be as cheap as Dacia models, but should undercut similar offerings from the likes of Skoda or Kia.

An official investors' presentation says that "Rational" Fiats will solely be built in one trim level and will come with the choice of two engines and just four exterior colors. The dealer will most likely install any additional luxuries such as sat-nav. Given this severely limited flexibility, showroom prices should also be fixed, and Fiat may even opt to market their cars directly online.

In spite of its rather fragile range, Fiat isn't doing as bad as you might think. 2015 has brought the Italians some pretty encouraging sales figures in Europe. Halfway through the year, 500 and Panda managed to account for nearly 28% of the A-segment, while the 500L was the best seller among MPVs with a 24% market share. The newly launched 500X didn't do too badly either, selling roughly 37,000 units during this time-frame.


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