Maserati will be FCA’s flagship brand after Ferrari spinoff

Article by Andrew Christian, on July 15, 2015

Fiat Chrysler CEO Sergio Marchionne is hoping that after it spins off Ferrari several months from now, Maserati will be able to competently fill the top luxury brand slot that it left. Ferrari has always been popular because of the power and prestige that it represents. As a result, this line’s profitability had financially supported the more mainstream models of Dodge, Jeep, Fiat, and Chrysler that make up majority of the revenue of Fiat Chrysler Automobiles NV.

Marchionne is willing to bet that Maserati will take on a similar role and so, he is plumping up the lineup with a new SUV and coupe. He will also open posh Maserati dealerships in the U.S. such as in San Jose, Calif., and Westport, Conn. During a recent interview, Marchionne referred to Maserati as “very important.” He explained that after the Ferrari spinoff, Maserati will be considered as its “most coveted, exclusive brand.”

Maserati is already known for its top performance and there has been a high demand in the U.S. market for luxury autos. However, the competition in this segment is fierce as its primary players BMW, Lexus, Mercedes-Benz, and Audi are all aggressive.

To be successful, Maserati has to convince rich American consumers that the Maserati Ghibli sedan priced at $69,800 (entry-level unit) is a better choice than the BMW 5 Series or Mercedes E-Class. In 2014, Maserati was able to double its deliveries to 36,448 units.

However, the brand is facing some challenges. From the start of the year until April, its sales have fallen by 9% to 7,306 units. Its profit for the first quarter dropped by 39% to $40 million. Fiat believes that this decline is the result of a slowdown in its Chinese market.

Launched in 2013, the Ghibli initially had impressive sales. But in the last few months, its dealerships have been raising their incentives. Last May, discounts have risen to as high as $9,602 per vehicle.

This is nearly triple what they offered in February, according to information from Autodata Corp. Mark Akbar of AutoNation Inc., which handles the store in San Jose, said that Maserati lost some of its “coolness” because some of the dealers became too aggressive with discounting the units.

He explained that the Ghibli is a “good car” and is able to perform really well but since its launch last year, its margins have “gone down the drain.” Maserati has to widen its appeal without losing any of its exclusivity that allows it to charge up to $210,000 for a convertible Quattroporte.

Maserati has been around for 101 years but it actually started out by selling spark plugs for airplanes. In 1926, it built its first car. It didn’t take long before it started winning races.

Since then, it broke many speed records. The first was in 1929 when it established a world record of 153 miles (246 kilometers) per hour. Its badge – a trident – is inspired by Neptune’s three-pronged spear. Maserati’s original hometown is Bologna, Italy.

Topics: maserati, fiat, ferrari

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