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Funny little Italian cars are finally coming into vogue, or so it seems after Fiat reported its best month of U.S. sales to date in February.
“I’m holding my breath, but to beat February would be a big, big win for us,” Fiat brand head Timothy Kuniskis told the Detroit Free Press.
With 3,227 units sold last month, it seems the company is on an upward trend. Still, it’s not terribly surprising because sub-compacts and compacts are out-pacing every other market segment for growth. Thanks in no small part to rising gas prices, the two sections are attracting new buyers to trade in larger vehicles in anticipation of fuel climbing beyond $4 per gallon in the near future.
While it’s undeniable that economic factors are playing a big part in boosting Fiat and other small car manufacturers, the company’s marketing strategy also deserves recognition.
Edgy ads like the Fist 500 Abarth Superbowl commerical and those that followed it are helping to bring the otherwise obscure name in front of consumers.
That obscurity is the direct result of Fiat’s 28-year hiatus from the American market. When the brand relaunched last March it had little marketing support and could have been written off as an unfortunate experiment by Chrysler CEO Sergio Marchionne.
Nevertheless, it seems like the company might have actually times its release wisely, leaving it in a position to sell sub-compact cars with Italian styling cues in a market where most of the competition sells sans-pizzazz.
Managing to replicate its February sales would be a big victory for the company, which is seeing growing interest in the hot-rod Abarth thanks to the aforementioned commercial and others like the recently-aired “House Arrest” spot featuring notorious badboy Charlie Sheen and a slew of sexy women.
Thankfully, it won’t take long to see how the company fares, at least in the short term. If current market trends are any indication of consumer preference there may be more Fiats in sight than you otherwise might have expected.
GALLERY: Fiat 500 Abarth
[Source: Detroit Free Press]
Fiat reported that its sales forecast for 2012 have fallen a staggering 500,000 units, adjusting the initial forecast from 2.7 million to a more modest target of 2.2 million units. Its Chrysler arm is forecasted to sell 2.4 million units next year.
Yet while forecasts have lowered, Fiat CEO Sergio Marchionne’s target remains high and maintains his ambition for 5.9 million total sales by 2014. By that measure, Fiat-Chrysler must gain an extra 1.3 million combined sales.
Massimo Vecchio, financial analyst at Mediobanka of Milan, Italy, says, “Marchionne’s 2014 volume target looks truly challenging, unless Fiat’s core markets can show a substantial rebound in the coming years, which looks unlikely now.”
While initial predictions made in 2010 for passenger car sales in the European Union plus Iceland, Norway and Switzerland were set at 14.6 million units next year, recent austerity measures will probably cause an adjusted decline to 13.4 million sales instead.
But more than economic anxiety, Fiat is also suffering from an aging product range, and is losing market share in Europe this year. Fiat’s market share within the European Union plus Iceland, Norway and Switzerland has fallen from 7.9 percent to 7.0 in just a year.
Morningstar’s automotive analyst, Richard Higert, adds his take, “Despite the probably downturn in Western European 2012 new vehicle demand, especially Italy, I think the company is expecting to benefit from the market onslaught it plans to unleash over the next three years with 35 new or significantly redesigned models, the bulk of which should come in 2013.”
Whether Marchionne’s leadership can lead Fiat back to stable profitability remains to be seen. In a previous article, Marchionne announced Fiat plans to slow investment and expansion activities amid shaky European economy.
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