Fiat Mounts Comeback in Spain

MADRID – Is the long-dormant Fiat awakening in Spain?

After posting gains in new-vehicle sales here for all of 2013, the Italian group, now Fiat Chrysler Automobiles, says deliveries jumped 26.7% in first-quarter 2014, outpacing by a wide margin the 11.8% gain for the market overall.

The performance surprises some observers here who have gotten accustomed to seeing Fiat operate in the red. Though financial results for the automaker’s Spanish operations have yet to be released for 2013, the group lost €22.5 million ($31.1 million) in 2012, marking the 18^th consecutive fiscal year of red ink, according to website Vozpopuli.com.

That track record has resulted in a revolving door at the top, with current Fiat Spain CEO Luca Napolitano the 13^th executive to hold that position since 1992.

Since arriving at Fiat Spain in July 2012, Napolitano has consolidated the group’s six brands – Fiat, Lancia, Alfa Romeo, Chrysler, Jeep and Fiat Professional (light-commercial) – into a single retail and service network and put together a 5-year plan that has analysts more optimistic about the automaker’s future in Spain.

The local dealer network has been cut from 138 to 104, a number Fiat believes will be a better match with the overall size of the market, expected to reach 1 million vehicles annually in the 2016-2017 timeframe.

“In such a way, every dealer will have more brands and a bigger territory to sell them in,” Napolitano tells the El Mundo newspaper.

The Fiat Spain CEO forecasts industry sales of 700,000-800,000 units this year, with the final tally dependent on the number of subsidy programs the Spanish government launches during the remainder of 2014.

Napolitano, who admits 40% of group dealers continue to lose money, forecasts a 5%-10% average increase in the annual turnover for the automaker’s dealers and says he hopes all will return to profitability this year.

Numerous times in the past, Napolitano has pointed out Fiat Chrysler is somewhat handicapped by its multi-brand strategy. A young buyer may start out purchasing a Fiat Panda or 500, but must move to another of the automaker’s brands if he wants to move up the price spectrum and remain in the Fiat family.

“Our competitors can offer an upscale model upgrading to their customers without changing their preferred brand,” he says.