Fiat has announced its new strategy for Maserati that will significantly raise production and sales during the next couple of years, supported by a widening of its product portfolio.
IHS Global Insight Perspective | |
Significance | Fiat has announced its new strategy for Maserati that will see a significant uplift in its production and sales during the next couple of years. |
Implications | Its efforts will be backed by a broader product portfolio that will include a new sub-Quattroporte sedan and a sport utility vehicle (SUV) and a wider sales network. |
Outlook | Despite Fiat's ambitions, IHS Automotive expects demand to reach around 20,000 units per annum (upa) at its peak, around half the levels that its own forecasts are anticipating. |
Fiat has announced its new strategy for Maserati that will significantly raise sales during the next couple of years. According to a statement released by the automaker, the announcement was made to public officials and trade union representatives at the brand's headquarters in Modena (Italy) yesterday (12 April). Fiat said that through leveraging its "existing presence in 65 markets worldwide and a new generation of products targeted at volume market segments, Maserati plans a significant increase in production, reaching up to 50,000 vehicles a year by 2015".
In order for this to be accomplished, due to the fact its production site at Modena cannot be expanded as a result of its city centre location, it will be joined by a second facility outside Turin known as Officine Automobilistiche Grugliasco plant, which was formerly owned by Bertone. The company is already upgrading this facility with the investment of EUR500 million (USD657.3 million). However, the Modena site will continue to produce the GranTurismo and GranCabrio model ranges, and will be joined by a new unnamed Alfa Romeo model—expected to be the production version of the 4C GTA—that will be built at a rate of around 2,500 units per annum (upa). Functions for the brand such as design, marketing and distribution activities for the entire product range will also continue to be located in Modena.
Fiat also said in its release that it will continue to manage the impact on employment levels during this period of crisis, restructuring and capacity underutilisation using the temporary layoff benefit schemes available. However, it added that it would also seek to make use of workers at other Fiat Group plants.
Outlook and Implications
This is the latest effort by Fiat, which acquired the storied Italian sports-car brand in 1993, to kick the brand's sales levels up a gear, already having successfully lifted sales from the hundreds to the thousands per annum. It has already announced many of the steps that it is planning to implement in order to achieve these new production levels, including the replacement of the Quattroporte luxury sedan which is now almost a decade old and which will be built at the Grugliasco site. This location will also eventually become home to another Maserati project, a smaller sedan that will fit below the Quattroporte, allowing the larger vehicle to move up a price level. This new model will compete with the high-specification Mercedes E-Class, BMW 5 Series and Jaguar XF, and will follow the Quattroporte on to the market next year. Another model set to be joining its range will be a new sport utility vehicle (SUV), the currently known as the Kubang. This model, which will be based on the Jeep's Grand Cherokee, will be its first model to be built outside Italy when it is manufactured at the US SUV specialist's Jefferson North plant in the United States. This model is expected to help broaden the appeal of the brand to a new type of customer, particularly in emerging markets where premium SUVs are becoming extremely popular.
Fiat is also said to be looking at widening its sales footprint in order to achieve the greatest benefits from this uplift in production levels and widening of its portfolio. The chief executive officer (CEO) of the brand, Harald Wester, has previously said that Maserati needed to double its current distribution network to around 500 locations globally to achieve these targets, and hoped to achieve close to this level by the end of 2012. However, it remains to be seen whether greater numbers of customers are willing to embrace the brand, which—although well known for its beautifully-styled, high performance vehicles—has had trouble in the past with the technology used and quality levels, although it has worked hard to address these issues in recent times. Certainly, while IHS Automotive expects a significant uplift from the 6,000 units sold in 2011 and from the record level achieved in 2008 when demand hit a high of 7,500 units, we do not anticipate that sales will hit the levels anticipated by the production capability on offer. Indeed, Maserati sales are expected to reach 20,000 upa at a peak in 2014, before hovering around this level dependent on the model replacement cycle. It will not be helped by the fact that many other premium automakers are also stepping up their efforts to broaden their product portfolios at the current time which will result in an increasingly crowded market place.