2023 Author: Eric Donovan | [email protected]. Last modified: 2023-08-25 09:36
After long years of losses, Fiat has turned the trend. Germany boss Werner H. Frey speaks in an interview with Autogazette about the other goals of the Italian manufacturer.
Fiat plans to sell three million vehicles a year worldwide by 2010. Targeted collaborations are intended to «open up territories in which Fiat is not so well represented. Besides India, this is especially Russia and China,”said Fiat Germany boss Werner H. Frey of the Autogazette.
This is intended to continue the turnaround that began last year after the loss-making years of the past. “We have good times ahead of us. After a thorough analysis, the management has initiated a restructuring course. We have reduced a mountain of debt from 9.4 to 1.8 billion euros within two years. It was accompanied by a comprehensive product offensive », says Frey.
Especially with the new models such as Grande Punto, Alfa 159 or the recently presented Fiat Bravo, the awareness of potential customers is to be heightened. “We have to be able to reach more people and change their perception. It's difficult to change a ruined reputation. But we are now proving with every new car that Fiat now has a different understanding of quality, that Fiat has a different understanding of safety, that Fiat uses different components. The customers we can win are convinced of it."
Good times expected
Autogazette: Mr. Frey, you have achieved a turnaround in the auto sector, the Bravo has just been introduced as a new beacon of hope. Is Fiat now looking forward to golden times after years of losses?
Werner H. Frey: We have good times ahead of us. After years of losses, which could be traced back to a failed corporate policy, the management initiated a course of restructuring after a thorough analysis. It was accompanied by a comprehensive product offensive.
Autogazette: At the beginning of the past year, would you have thought that Fiat would deliver such a performance in 2006?
Frey:In 2004, the experts didn't give much more to Fiat. Today we are the group that has grown the most in Europe. We have reduced a mountain of debt from 9.4 to 1.8 billion euros within two years. We have gained 20 percent. We are profitable again. The problem child in all Fiat divisions was the automotive sector. And now we have grown profitably again since 2005. The Fiat Group, i.e. Fiat, Alfa Romeo, Lancia and the Transporter - have grown by 30 percent in Germany and are also growing in Europe. But we want more, we want to keep growing. We have big goals.
Autogazette: Where do you see the reasons for this success, especially in Germany?
Frey:It has to do with the products. They are the be-all and end-all. And again we have products that our customers like, that they find appealing and attractive. And above all, the volume models such as the Grande Punto at Fiat or the Alfa 159 have contributed to our great growth. But we also have vehicles like the Brera or the Spider, with which we do something for our image. Our van division is number one among the importers.
Lancia part of the strategy
Autogazette: While Fiat and, above all, Alfa Romeo increased sales strongly, Lancia stagnated. The group is currently still committed to the brand, but how much longer?
Frey: The group is clearly committed to the brand, nothing has changed. We're bringing a total of 23 new models to market by 2010 - and Lancia is part of that strategy. We showed the Delta last year at the Paris Motor Show, but it won't be on the market until 2008. Nevertheless, we want to position Lancia better with dealers this year, even if we don't have a new product. This year we want to sell 3000 Lancia in Germany. To this end, we will strengthen our dealer network, hire 200 new salespeople, so far we have already signed 50 of them.
Autogazette: Does the new hiring result from the ongoing dispute between the Fiat and Lancia Dealer Association?
Frey: In general we have a good mood. But we have to differentiate between the dealers and the association. There are points of friction.
New understanding of quality
Autogazette: Do not portray the situation in a very trivial way: Authorized dealers are said to have been openly threatened to cancel goodwill services if they expressed other ideas about the annual purchase. In addition, the members would be intimidated with possible invoice and premium checks, which could result in a warning and termination without notice. Surely that can't be good for the brand's image?
Frey: … That is not a good thing, which is why I pointed out the good mood and the difference between retail and association beforehand. I take this very seriously. I also see it as an attack against my employees. The fact is: We have great products and a completely new understanding of quality. We have three goals to which we are very slavish. These are growth, profitability and customer satisfaction. There are of course dealers who groan and turn to me. I take care of that personally. But 98 percent have signed the targets. As for the allegations: This is about dealers who buy third-party aftersales but still want to make use of the Fiat warranty. That is not possible. But I have told my people not to put any pressure on them, even when the fighting is tough. The dealers are our most important customers.
Autogazette: To what extent does the saying “error in all parts”, which has been an abbreviation for Fiat in Germany for decades, still damage the brand's image today?
Frey: I can also name a few completely different ones. - I'm quite honest: of course we still have to fight it. But we are now proving with every new car that Fiat now has a different understanding of quality, that Fiat has a different understanding of safety, that Fiat uses different components. The customers we can win are convinced of it.
Autogazette: Now it's a matter of convincing other groups of buyers …
Frey: … yes, we have to be able to reach more people and change their perception. It's difficult to change a ruined reputation. But we have good resources to do this with our new products. When I stand in front of a Cinquecento, my heart opens. I think we will win a lot of people who think back to the old days of the Fiat 500. But we will also win many people who have nothing to do with the past. It will be a cute, great car. Fiat is doing something like that again. The red lantern in the TÜV statistics for the past ten years has also been adopted by others. That's why I'm not at all worried that we will develop positively and that we will be able to change this perception.
Autogazette:How can such a quality change be brought about?
Frey: This is where the partnerships pay off. On the one hand with new partners, on the other hand with partnerships that we have left behind. There were qualities in the vehicles that did and do the vehicles good and that we didn't have before. Other partners benefit from our diesel engines.
Autogazette: Is the introduction of the Cinquecento an indication that Fiat is on the way back to its core competency of building small and practical cars?
Frey:No, because we already have a certain range with our four brands right up to the premium range. With Alfa and Fiat we will grow in both the upper and lower segments, with Lancia we will keep moving. And the new Scudo will do well in the transport sector, as the popularity shows. We will grow like no other transport importer. Let us be surprised by the numbers at the end of the year.
Natural gas as an alternative drive
Autogazette: With its model range, Fiat already achieves CO2 emissions of less than 140 grams per kilometer. In view of the climate debate, why not emphasize this core competence more clearly?
Frey: We have already passed the limit thanks to our portfolio with a high proportion of diesel. We have made great strides in this area compared to other manufacturers. Even if we position ourselves more broadly in the future with further models, we will try to be where we are today, namely under 140 grams.
Autogazette: You also rely on natural gas. Is this your way into the automotive future in view of the increasingly scarce fossil fuels or does Fiat also have a future with fuel cells?
Frey:Fiat stands for affordable technologies where the benefits pay off immediately. They pay off with natural gas vehicles. With the Fiat “Panda Panda” we also offer a unique vehicle in this class that is very economical on the road. We want to offer technology that you can use today. The gas stations are now adapting to it. We have the broadest range and the longest experience in the natural gas sector because we've been using it in Italy and Holland for a long time.
Autogazette: With the “Panda Panda” you are using the underfloor technology in the small car class for the first time. Previously, in this segment in particular, the gas bottles in the trunk took up so much space that a punto became a two-seater?
Frey:?? I like to admit that there was not always an optimal solution. But it is simply a technology that we offer for people who want to be environmentally friendly and want to save. Sometimes you have to cut corners. But we always want to find the optimal solution and in most cases we will find it. Above all, we try to offer the solutions for a certain breadth instead of just equipping one vehicle with natural gas like others. We rely on these drives.
Diesel engines have priority
Autogazette: Are you going to offer other alternative drives?
Frey: We're working on it. But we are not now saying that in two years we will be launching this and that product on the market. It's important to have affordable technology to travel with. Of course, we can also imagine an electric car and say that is the ultimate. But if it's only ready for series production in ten years, it's of little use at the moment.
Autogazette: Competitors say that they will hit the market with an electric car in three or four years.
Frey:We will definitely not have such a car by 2010. We have a clear timetable with our economical gasoline engines and our technologies. We continue to work on our diesel engines. These are the obvious problems.
Three million cars a year
Autogazette: You create jobs in India by offering a cheap car for the equivalent of 2200 US dollars together with your partner Tata. What else can you earn with a car like this?
Frey:We should be making money on every product we produce. That is also the direction of the new management. In the last year and a half we have concluded 13 partnerships. We have two goals. On the one hand, we want to find partners with whom we can work in territories where Fiat is not so well represented. Besides India, this is especially Russia and China. We want to grow again to three million units sold per year by 2010. We have corresponding potential in these markets. Other partnerships pursue the goal of technical cooperation, for example with Ford Europe. There the Cinquecento and the Ford Ka are based on one platform. We have thereby created a great deal of flexibility.
Autogazette:So the cheap car will be your spearhead in the rapidly growing Asian market?
Frey: We will have to wait and see what the result of the collaboration with Tata Motors will be. Then it will be decided whether the car will be exported or remain in India. But we are already trying to sell our current products as part of this cooperation.
The interview with Werner H. Frey was conducted by Thomas Flehmer
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