Fiat is looking into building a low-cost brand that would rival Nissan-Renault’s Dacia, according to CEO Sergio Marchionne.
“We are wondering if there is space for a low-cost brand such as Dacia in the Fiat world,” Marchionne said to Automotive News. If the brand does come to fruition, the cars would have to be built outside of Europe to maintain low-cost production. If the cars were built in Europe and sold for around $10,000, they would not produce profit for the brand according to Marchionne.
The Fiat brand is currently trying to move upmarket, concentrating on two near-premium model families, which could leave room at the bottom. ”We need to see if there is a space left below after the Fiat brand moves up,” Marchionne said.
So far, the low-cost Fiat brand hasn’t happened because execs are worried it won’t be profitable. Dacia operates with an operating margin of nine percent and is very profitable for Nissan-Renault, proving that it is possible for a a low-cost brand to work.
[Source: Automotive News]
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