New car rollouts pave the way for stronger Fiat sales

Fiat sales are on the rebound following the launch of three new compact and medium models this year, industry sources said last week. "(Sales figures in) May will show an increase, because we now have new models on the market," said Jose Ramon Soriano, commercial director for Fiat Auto Poland. Poland's No. 1 car maker for years, Fiat has seen its sales plummet for the past three, threatening the automaker's market supremacy. In April, just 3,357 Fiats were sold, compared to 5,178 in January and 8,797 in January 2001. Although other manufacturers have also suffered from plunging turnover, Fiat's losses have been particularly severe. Fiat commanded a healthy 27% of the market in 2000, a figure that tumbled to 17.7% in the January-April period this year - and only 12.2% in April, according to Samar, a car market research firm. But Soriano said Fiat's market share would recover to 15% in May as sales of the Albea, Stilo and updated Palio Weekend, which all hit the market between January and April, are helping lead to an uptick in turnover. Fiat dealers confirmed a sales recovery was under way. At the Warsaw-based Carserwis dealership, May sales increased over the previous month, according to Jerzy Szatanik, the firm's president, though he declined to offer details. Fiat dealers interviewed for this article are optimistic that the worst is behind them. "We kept our market share in January and February, but we suffered a severe drop in March because of the flood of old used-car (imports)," Soriano said.

Government help Anticipating stiffer barriers on the import of used cars from the European Union, Poles brought in more than 100,000 used cars from Western Europe until restrictions were imposed in mid-March. Despite that measure, the market will still need several more months to absorb those cars before new vehicle sales start to show a significant rebound, according to Wojciech Drzewiecki, Samar's president. "Fiat's sales should increase by year-end," Drzewiecki said. Fiat's overall market share should rebound as well, he added, and the company thinks it will return to 2001 numbers. "We project that we'll eventually sell as many cars as last year," said Bogusław Cieślar, spokesman for Fiat Auto Poland. Poles bought 78,000 new Fiat passenger cars last year, according to Samar. Boom and bust Poland saw an impressive boom in car sales in the late 1990s, with small cars topping the list, and Fiat, which has a plant in the southern city of Tychy, commanded a third of the market. But the weak economy chased off buyers and the government's gradual lifting of import tariffs on cars from the European Union dampened local makers' sales further. At the same time, some wealthier compact- and medium-sized car buyers have shifted toward slightly more expensive, better-quality cars over the past months, Drzewiecki said. Fiat has also suffered from the strong złoty. "The strong złoty fueled our costs, as a few of our models are made in Poland," Soriano said. He said his company's sales would return to 20% market share in the fourth quarter. "Our market share was based on the sales of Seicento and Punto (low-priced models), and the flood of used cars hit the price range below zł. 25,000," Soriano said.

New models But Fiat is hoping the launch of the Albea in January, the Stilo in February and a fresh version of the Palio Weekend in April will recapture a chunk of mid-range buyers. The rollouts will improve Fiat's sales in Poland, said Tomasz Maksymiak, president of Autointernet.pl, an Internet car sales portal. "These are new models and their price is comparable to that of similar cars by other makers," Maksymiak said. Drzewiecki agreed that the new models would improve the carmaker's image as they offer more extras in their base versions, a modification that has also gobbled up Fiat's price advantage over competitors. However, "the standard version upgrade is a good step, but it was done at the wrong moment, as buyers expect price cuts rather than price hikes in the current market situation," he said. "And every change of image is a long-term process." Soriano defended the firm's attempt to bolster the carmaker's image at the present time. "We're moving away from the strategy of Fiat as a car that is bought because of its low price," he said. While the new-model launches may help boost the company's financial results, Fiat Auto Poland, like its Italy-based parent, will post another loss this year, Soriano said. He added, however, that the loss would be much lower than the last year's zł. 289 million ($70.5 million).