The road back

Michał Pakulniewicz: 2005 will not be remembered well by Fiat Auto Poland. Your sales fell by over 50 percent in comparison to the previous year. What was the reason for this?

Enrico Pavoni: The car market in Poland wasn't great in 2005 for one simple reason - the import of second-hand cars. If you make an analysis of the market, the small- and cheap-car segment was hit the hardest, while the larger, luxury car segments were hardly effected. Generally, while the market as a whole fell by around 26 percent, sales in the small-car segment were even 50-percent lower.

For many years Fiat was the market leader, but in 2005 for the first time you fell to third place. Do you plan to regain your position?

After two months of 2006 we are fourth on the market. Starting from February we have witnessed an increase in sales. After a poor January, we ended the second month in second position just behind Toyota. This comeback is the result of the sales of the new Punto - nearly 500 units were sold in three weeks of February. It continued to sell well in March. We plan to finish the year in a better position than the previous one. February's results, and March estimates, have shown that we are on the right path. We hope to sell around 30,000 cars this year in comparison to nearly 25,000 last year.

Looking at the statistics, you sold more cars in February than in January. But the numbers are still lower year to year. Does this mean that the market crisis is continuing this year?

The market is falling constantly and there are no signs of changes in the trend. In the first two months it was 13 percent year to year. We expect that the parliament will finally pass the environmental tax to replace the excise. This could settle the issue of the mass import of second-hand cars. If this goes through, we could expect, maybe not right away, but perhaps after six months, that the sales of new cars will start to rise. There are other optimistic factors - the growth of GDP and the increase in the consumption level. The growth of investment should result in the decrease of unemployment which also could affect the sales of cars.

How do you plan to buck the trend in the automobile industry? Does Fiat have any investment plans in Poland?

In mid-2007 we plan to launch the production of the Fiat 500 and we hope that in the fall we will start selling it in all markets. Then in 2008 we plan to start producing the new Ford Ka. This will give us the chance to increase the production level at the Tychy plant, which will mean bigger exports and larger employment. There are many ideas for investments, so the exact sum is not yet known, but I think that it should be at the level of investment for the Panda's launch in 2003 [which was EUR 570 million]. This will definitely be linked with the creation of new jobs. It's too early to talk about exact numbers, but they should be in the hundreds.

While 2005 wasn't successful for Fiat in terms of sales, you remain the largest car producer in Poland. Does the situation on the Polish market mean that you are focusing on export?

Over 92 percent of our production is exported. We meet the needs of the Polish market in one working day in a month. We export our cars to 51 countries with Italy being by far the largest importer. There are some exotic countries among the importers, but also some very prestigious markets such as Japan to which we exported over 1,000 cars [in 2005], mainly Pandas.

Interviewed by
Michał Pakulniewicz