Fiat-Chrysler is finally going to replace the Alfa Giulietta

The Fiat-Chrysler group (FCA) has planned an extensive program to revitalize the  Alfa Romeo brand, that is currently declining (target: 500 000 sales in 2020 against less than 100 000 in 2013). In the brand's re-launch program, the manufacturer focuses primarily on high-end vehicles (segments D and E). The Mito (B segment) and Giulietta (C segment) therefor seem doomed.


The Giulietta will after all  have its offspring, which makes sense when you consider the recent history of the Alfa Romeo brand which focused on C-segment models, and if we also consider its competitors (Audi, BMW, Mercedes, Lexus Volvo) that all have C-segment models (A3, Series 1, Class A). The Mito will be the only model which won't be replaced.


It will be more likely for Alfa-Romeo to reach 500 000 sales in 2020 with the help of a C-segment model (manufactured in Cassino, Italy), which could represent up to 100 000 sales per year.


This program is part of a broader strategy of brand repositioning inside the FCA group. Fiat will become the entry-range brand, Dodge the mainstream brand, Chrysler will become an intermediate between mainstream and premium brands, Alfa-Romeo the premium brand, Maserati and Ferrari brands will become the super-premium brands. The Jeep brand will hold a special place, it will market all of FCA's SUV starting from entry level to Premium level. The Lancia brand will be permanently removed.

 

14-18-1  

 
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In India, the market continues to decline in the first quarter of 2014

Vehicle sales (PC + LCV) in the Indian market continued to decline by -11% in the first quarter of 2014 to reach a volume of 790 000 units. It therefore declined even more after 2013, a year that was already negative (-10% compared to 2012).


In the leading brands in India, only Honda (+55%), Ford (20%) and Nissan (25%) saw their sales increase. Hyundai remained stable while Tata (-53%), Toyota (-56%) and VW (-69%) saw their sales fall sharply. In a declining market, Honda's share grew by 4% while Maruti-Suzuki increased (+3%) despite a slight decline in sales (-3%).


In terms of models, the TOP 10 of the market is still monopolized by Maruti-Suzuki models from segment A and B (M800/Alto/A-Star, Swift / Celerio, Dzire ...) ahead of Hyundai models i10/i20 / Eon. The strongest growth is for Honda and its City model, whose sales increased by 60%. One will note the arrival on the market of the Nissan Datsun Go which has made a good entry with nearly 3 500 units sold in the first three months. The Datsun Go (segment A), which was launched in 2013, is one of the cheapest models in the Indian market (400 000 rupees or 5 000 euros) and competes with entry level Maruti Suzuki models and Tata Motors.


Let us recall that cars from segments A and B represent 80% of sales in India. Maruti-Suzuki alone holds 45% of sales in this market. The Renault-Nissan group holds only 2% (in 2013), but seeks 10% by 2016, thanks to the Datsun Go.

 

14-17-8  

 
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Pakistan production and market analysis

Pakistan is a country that assembles passenger cars (CKD) but does not produce them. In 2013, the country assembled 121 000 vehicles after a peak in 2007 (176 000 units). This decline in production is mainly due to the recession that hit the country after 2007 and the severe floodings of 2010. Pakistani auto plants are underutilized because the country's plants have a capacity of approximately 270 000 units (i.e. only 45% usage rate).


In a country where the motorization rate is low (8 vehicles/1000 inhabitants in 2007), production is intended only for the local market. Importing very few vehicles (mostly sedans from segments D and E for businesses and administrations), we can hence consider that the annual market is equivalent to the annual production. Which ranks Pakistan in the 45th place world wide in terms of PC registrations. (behind Kuwait and before Morocco ) and 33th largest global producer ahead of Portugal and behind Uzbekistan.


In 2013, the production of Pakistani PC was composed of 100% Japanese vehicles: Suzuki (55% of annual production), Toyota (in JV with Indus -  25%) and Honda (20%). Since the beginning of 2014, Hyundai has entered the market.


In the first quarter of 2014, 8 models were produced:

       - 4 Suzuki: The Mehran (former Alto - segment A), Cultus (former Swift - segment B), the Bolan (Minivan) and the current Swift .

       - 2 Honda: The City (segment B) and Civic (segment C)

       - 1 Toyota: the Corolla (segment C) is the most produced and sold model in the country.

 


14-17-6  

 
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Many markets have declined in the first quarter of 2014

In the first quarter of 2014, global passenger car sales rose by 5.7%, but it has been found that four regions have been driving growth during this period: China (+10.1%) that still benefits from a strong demand, Japan (+20.9%) which anticipates the VAT rise on cars in March going from 5% to 8% , Europe (+8.0%) which finally restarts after six years of decline (2008 -2013), this region saw its sales drop by 23% during this period, and finally South Korea (+7.2%), which saw its sales restart after a sluggish year 2013.

Most other major markets were down during the first quarter of 2014: United States (-4.1%) and Canada (-7%) suffering from early on weather conditions which severely disrupted business activities. Brazil (-5.1%), the economy is slowing following a period of euphoria. India (-6.9%), the economy slowed and awaits the next election and a possible change in economic policy. Russia (-2.3%) who suffers from an unstable political and economic climate, that may worsen in coming months. Mexico (-2.4%) should still experience growth in the long term. Turkey (-22.6%), which shows the lack of confidence of Turkish consumers after major currency fluctuations, the high interest rates, higher taxes and the measures taken to control the banking sector.

 

14-17-9  

 
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Changan is the Chinese manufacturer that has the highest growth in Q1 2014

In the first quarter of 2014, Changan was the fourth largest vehicle seller  (PC + LCV) in China with 670 000 units sold, including brands produced in JV (Ford, Suzuki, Mazda and DS). At the 4th place behind SAIC (940 000) DFM (820 000) and FAW (798 000). The carmaker BAIC (535 000) is ranked behind Changan.

These manufacturers have all increased their sales volumes compared to the first quarter of 2013, and will represent nearly 64% of Chinese market in 2014. FAW is the manufacturer that has gained the most market share during this period, from 12% in Q1 2013 to 14% in Q1 2014 but Changan experienced the strongest growth among the five. With +22% Changan is experiencing an increase more important than FAW (+18.6%), SAIC (+13.5%), BAIC (+13%) and DFM (+12%).

In the first quarter of 2014, the top 10 vehicles sold by Changan accounted for 64% of the carmaker's global sales. In the Top 10, 7 models are sold under its own brand and 3 models under the Ford brand. The Ford Focus being the manufacturer's best seller.

Throughout the year, Changan has announced plans to sell 2.5 million vehicles through JV, including one million units of its own brand. This is the first time Changan would reach one million units with its own brand (822 000 units in 2013).

If the growth rate of Changan is confirmed in 2014, the manufacturer will consolidate its leading position as an independent brand and its fourth place as a  Chinese assembler behind SAIC, FAW and DFM.

 

14-17-7  

 
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