Fiat CEO Marchionne expects weak Europe market in the next 2-3 years

Article by Anita Panait, on July 4, 2012

Fiat chief executive Sergio Marchionne forecasts that the European car market will remain weak for the next two to three years, saying that he does not expect sales in the continent to recover during the period. Speaking during the sidelines during the launch of the Fiat 500L small minivan, Marchionne justified his decision to postpone the rollout of new Fiat models like the new Punto subcompact in Europe and to reduce investment in the region by EUR500 million ($630 million) this year. 

According to Marchionne, launching the revamped Punto subcompact would result in a "failure" since the European auto market is still suffering from a price war and lower volumes. Fiat’s CEO said the current transaction prices for the new subcompact models mean that the company would not be able to recover its investments in a new Punto.

Marchionne said the company is being extremely cautious on investing if it cannot recover its investment. Car sales in Europe fell for the eighth consecutive months in May by 8.4 percent to 1.15 million units in May 2012, according to industry association ACEA. New-car sales in the continent are expected to drop 7 percent from 13.6 million units in 2011 to 12.6 million vehicles in 2012. 

In developing the new 2012 Punto, Fiat used its long history of making cars that break the old mold as well as small cars that continue to lead the class. Even if it is part of the most dynamic class, as well as the most competitive, the new 2012 Punto will have nothing to worry about given that this supermini has the style and the technology to back it up.

Fiat will be making available a three-door version or a five-door one. Regardless, it will also offer a wider selection of environment-friendly engines as well as additional equipment. It will even more customization options that ever. The goal is to make sure that customers will be able to get the most out of this model despite being a smaller vehicle.

Since it is an environment-friendly car, it is affordable, easy to drive, and not difficult to live with. It is also comfortable, safe, and chic. This is not a surprise as the 2012 Punto was made in order to appeal to a younger demographic.

While it has been called as the Grande Punto, or even the Punto Evo, in the past, the choice to go back to the simple Punto name is to complement the look. Aside from having a new design on the exterior, a new range of colors will be offered as well. The alloy wheels will also have a new design.

Even the interior will have not only the use of new colors but new materials too. That goes without saying that the TwinAir, which has the new engine, will also be part of the range. In order to make sure that the 2012 Punto will be indeed able to attract a younger set of buyers, Fiat will be offering a total of five trim levels which are Easy, Lounge, Pop, GBT and TwinAir.

The Pop trim for example is for customers who want a more affordable car but also want one that comes with style. For example, its seats have stylish denim inserts. All models though will have the Daytime Running Lights and there will be the option to have the Blue&Me TomTom LIVE infotainment system. Even with all of these, it is important to note just how strong the Punto is when it comes to sales.

In the supermini class for example, despite having a total of 30 different models, the Punto continues to get 25% of the market share. Other models are not only from Europe but also hails from Korea and Japan. Without a doubt, ever since it was first launched back in 1993, it is estimated that around 8.5 million units of the Punto have been sold across Europe.

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Topics: fiat, ceo, europe



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