The new brand organization at GM, Ford and Chrysler
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The new brand organization at GM, Ford and Chrysler
- With the Buick brand disappearing from the North American market this year, the structure of the former Big Three, GM, Ford and Chrysler, has a whole new look.
- Indeed, each of the three manufacturers has only one general brand (Chevrolet for the first, Ford for the second and Dodge for the third) and a luxury brand (Cadillac for the first, Lincoln for the second and Chrysler for the third). Intermediate brands like Oldsmobile, Pontiac, Mercury and most recently Buick have all disappeared.
- This brand structure is reminiscent of Japanese manufacturers based in North America, such as Toyota (Toyota, Lexus), Nissan (Nissan, Infiniti) and Honda (Honda, Acura).
- There are also the light trucks brands (GMC for GM, Jeep for Chrysler) which are still very much alive. Ram is actually the LCV of the Dodge brand, although recently the FCA group has been considering it a separate brand.
- General brands Chevrolet, Ford and Dodge are not directly threatened, especially thanks to the presence in their range of large pickups Silverado (Chevrolet), Series F (Ford) and Ram (Dodge) which have the highest registrations in the US. The situation is more difficult for the luxury brands, Cadillac, Lincoln and Chrysler, which have been marginalized by the German (Audi, BMW, Mercedes) and Japanese (Lexus, Infiniti, Acura) Premium brands.
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What strategy for the Fiat-Chrysler Group?
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What strategy for the Fiat-Chrysler Group?
- The discontinuation of the Fiat Punto, and the concentration of Fiat production on the 500 and the Panda, adds to other decisions of the FCA group which resulted in the discontinuation of the Chrysler 200, Dodge Dart and Dodge Viper. The production of the Dodge Caravan, which stopped in August 2017 to shift volumes to the Chrysler Pacifica, resumed abruptly in December 2017 to meet customer demand. The discontinuation of the LanciaYpsilon, and of the Lancia brand overall has been confirmed. The sales ambitions of Alfa-Romeo and Maserati have been dashed. The shutdown of Fiat's production in China and India, two of the largest potential markets, completes the picture.
- In 2017, the FCA Group moved from seventh to eighth worldwide, behind Honda. The group's various attempts to associate with other OEMs have all failed. As a result of these failed attempts, the FCA Group can not develop the most modern technologies, such as modular platforms, hybrid and electric engines or the hyper-connected and autonomous car alone, while at the same time the FCA group has decided to stop the production of diesel cars by 2022. Only LCV will continue to be equipped with this type of engine.
- The situation of the FCA group seems very fragile today, especially since its strategy shows little initiative or offensive. Perhaps the new leadership that will take office in 2019 will adopt a different strategy.
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The Fiat Punto will not be replaced
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The Fiat Punto will not be replaced
- After much procrastination and many project definitions that could have led to the replacement of the Fiat Punto by a new model produced in the Fiat plant in Tichy (Poland) for labor cost reasons, the management of the FCA group has announced that they have decided not to replace this B segment sedan that was once one of the best-selling models in Europe. From 450,000 sales recorded in Europe in 2006, the Fiat Punto dropped to 300,000 sales in 2009, then 150,000 sales in 2012 and only 50,000 sales in 2017.
- The management of the FCA Group believes that competition is too fierce in Europe in the B segment, a segment that, according to them, generates little margin. In addition, they believe that SUVs, where sales are growing, will make up more than 40% of the car market in Europe within five years, compared to 30% today. They conclude that under these circumstances, a B segment sedan project would be useless, or even counterproductive.
- As a result, the existing Fiat 500L and 500X will continue to play their role in B segment, but no Punto-style sedan will be added. The Fiat Punto should therefore end its career in 2018 or 2019, with no follow -on vehicles. As for the Fiat 500L and 500X which together totaled 200,000 sales in 2017, they will be restyled and replaced, in the same way as the Fiat 500 (A segment) which remains with the Panda (A segment) the most produced Fiat model in Europe.
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The VW New Beetle will not be replaced
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The VW New Beetle will not be replaced
- The Volkswagen Group confirmed at the 2018 Geneva Motor Show that the New Beetle will not be replaced. Sales of this model, launched in 1998 and updated in 2011, did not meet VW objectives of 150,000 units per year, of which 100,000 in Europe.
- Indeed, the New Beetle sold only 60,000 units in 2017, compared to 90,000 in 2014 and 110,000 in 2013. The first generation launched in 1998 and marketed until 2011 sold 1,165,000 units in 13 years, or 90,000 units a year. The second generation launched in 2011 sold 522,000 units as of the end of 2017, and Inovev estimates that sales of this model will reach 150,000 units between 2018 and 2022, when the model is likely to be discontinued. This second generation will therefore have sold 672,000 units over its 11-year life cycle, or 60,000 units per year.
- The results achieved by both generations of the Volkswagen New Beetle are therefore far removed from VW’s 150,000 /year objectives. In Europe, sales of the first generation of the New Beetle have never exceeded 45,000 /year, and that of the second generation 35,000 / year. The New Beetle may have suffered from the ”internal” competition of the VW Golf which has a better set of features and benefits than the New Beetle, which has been condemned to being a niche vehicle.
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Geely acquires 9.7% of Daimler Group
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Geely acquires 9.7% of Daimler Group
- Chinese automaker Geely, owner of Volvo Cars, but also of London Taxi Cars (LTC) and Lotus, which recently took a stake in Proton (49.9%) and Volvo Trucks (8.2%), has just acquired a 9.7% stake in the German Daimler Group. Geely, the first independent Chinese automaker, becomes the largest shareholder of Daimler (Mercedes, Smart, AMG), before a Kuwaiti public fund (6.8%) and the Renault-Nissan group (3.1%).
- Geely has not revealed their intentions regarding this new acquisition, but Inovev believes that the Chinese could be interested in the technologies of the parent company of Mercedes, especially concerning electric motorization (for cars, vans and trucks) and autonomous cars (satellite connectivity with internet). This transfer of technology could be of interest to Geely's subsidiaries, such as Volvo Cars, LTC, or Lotus.
- At the same time, with this new participation, Geely has gained presence at the world’s leading truck manufacturer (Daimler) while being already a shareholder of the world’s second truck manufacturer (Volvo Trucks). Perhaps there could be a desire to eventually merge the two major global truck manufacturers?
- Geely's participation in Daimler, however, raises two questions: what will be the future of the partnership between Daimler and BAIC in China and the future of the partnership between Daimler and Renault-Nissan in Europe?
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