Lancia rises from the rust





















Plans are afoot to bring Lancia, one of the most luminous of Italian marques, back to the UK. The brand has not been seen here since 1994 when its nemesis, the British climate, infected the breed with a fatal dose of the dreaded tin-worm. The rust problem was mainly attributable to the low grade Russian steel that was used in the Series 1 Beta, introduced in 1973. Some of these models were so badly afflicted that they were being scrapped at just five years old. The Beta was otherwise far ahead of the more dowdy British competition but despite the later offer of the first six-year corrosion warranty it was not worth Lancia’s trouble fighting over niches. The company then took the decision give up on all right-hand-drive markets. British buyers may not have missed out on much since the following decade was hardly the finest period in Lancia’s history: the Kappa executive was a rather insipid version of the Alfa Romeo 166.


Now parent company Fiat is in an expansive mood and looking to boost its fortunes by promoting Lancia. Last year 83% of the brand's 116,000 sales were within the Italian market, and the aim is to reduce this dependency to 60% by 2010. Yet with total production volumes intended to equal that earmarked for Alfa Romeo at 300,000 this will still require an increase at home to 180,000 units. At this level Fiat hopes to earn a 4% return on sales. Export markets are being reassessed, the 2008 Delta having been engineered for right-hand-drive markets and the new high volume Ypsilon following in 2009. This makes possible the move back into Britain where Fiat has ambitions to achieve 100,000 sales a year by 2010. With the launch of the new 500 and Bravo building on the success of the Grande Punto for the Fiat brand such a target is understandable, but it is not clear what support Lancia will be able to lend. In Italy the Ypsilon is the high volume model, taking 65% of production output, but it is virtually unknown in export markets and is up against some well entrenched competition. In the UK the Ypsilon is likely to be completely overshadowed by the Fiat Punto equivalent, itself something of a niche selection.


AutoCognition has estimated the number of sales Lancia is likely to reach, given that it is returning after a fourteen year hiatus. It would be tempting to suggest that Lancia could take a slice of Fiat’s pie, and 10% of 100,000 would be very tasty. However, since the cars will be sold through Fiat’s Alfa Romeo dealerships, it would be fair to say that the returning Lancias will find themselves in a niche within a niche. Alfa Romeo sales last year were about 5,200 units, down from last year of nearly 6,000 units. Without the sporty cachet that provides Alfa Romeo with market visibility it is likely that Lancia will struggle to be conspicuous. The concept of executive or luxury small cars has never made much of an impression on the UK so Lancia’s sales are likely to be a fraction of Alfa Romeo’s, particularly when the sales teams will have to learn how to two distinct types of product. AutoCognition therefore expects that, rust or no rust, Lancia will be looking at annual sales of around 1,000 units a year.




WEekly News - 25 June 2007


Volvo Gunning for Jaguar

Lancia Rises from the Rust

SMMT: Saving the planet half a tonne at a time

New Mondeo - the last ford


SMMt: saving the planet half a tonne at a time

The SMMT is giving car makers a pat on the back for reducing the CO2 emissions from their vehicles to the extent that over five million tonnes has been saved over the past ten years. This is due to the ‘greening’ of vehicles such that emissions are now down by 12% on 1997, or an average of 22.6 g/km per new car. CO2 is believed to be one of the greenhouse gases and the burning of fossil fuels, which trapped carbon safely underground for millions of years, is leading to net increases in CO2 in the atmosphere.


However, the news from the SMMT is unlikely to be greeted by a standing ovation from environmentalists. The saving equates to an average reduction of half a tonne of CO2 a year since 1997, and while the increase in CO2 being released into the atmosphere is slowing it still results in a net increase overall.


Organisations such as CNW Research in the US prefer to look at the whole-life of the vehicle, arriving at the rather startling conclusion that the Jeep Wrangler is more environmental than the Toyota Prius since the Japanese hybrid requires a greater number of complex components to be manufactured for it. At the Accelerate Clusters Conference, Dr Ian McCrae of TRL also reminded participants that emissions from vehicles amount to far more than the range of noxious substances ejected from the tailpipe, never mind CO2 alone. Other pollutants included evaporation emissions from other ancillary items such as air-conditioning units as well as particles thrown off by tyre abrasion.




Volvo gunning for Jaguar

Jaguar is not yet in its coffin yet Volvo is already

making a move on its turf. The Swedish company

has recently announced R-Design versions of its

models, threatening the hard work Jaguar is putting

into establishing its own R series with the XJR, XKR

and S-Type R. Jaguar had originally been working

on an R version of the X-Type which was due to have been launched in late 2003, until Ford cancelled the programme. It is into this very gap in the market that Volvo has stepped, this time with the support of Ford.


This speaks volumes for Ford’s attitude to its PAG division, none of it good for Jaguar. Even if Ford were to keep hold of Jaguar it has clearly abandoned the X-Type. This model had been intended to take Jaguar into BMW’s 3 Series heartland and allow the British firm to access the benefits of economies of scale. Although the X-Type was no clunker, it did not achieve quite the rapturous welcome that had been expected for it. Much of this, surely, was down to its derivative retro styling and the lack of an engine with real bite. Although the commercial need for a small Jaguar has not diminished, Ford seems to have decided not to learn from experience and the increasing sportification of Volvo is a clear indication that the model is finished.


The emergence of the R-Design Volvos also suggests that Ford is getting ready to position the entire Volvo range in the vacancy left by Jaguar. The Swedish cars already boast the kind of sensual styling that Jaguar once called its own, and now they are getting the performance connotations to match. To add insult to injury, this is being done by using the R tag that was meant to apply to high performance Jaguars, not family orientated Volvos. It is therefore likely that the new R-Design Volvos will be Jaguar’s epitaph. Expect a range of new off-roaders to be dancing on Land Rover’s grave in due course.




New Mondeo - the last ford

Ford has always been justifiably proud of its heritage in mobilising the masses for the first time in history. The Model T probably did more to bring to bring personal freedom of movement than any other form of transportation. Henry Ford had brilliantly recognised that by stripping cost and price out of the product corporate profits would rise on the back of increased sales. Building the product down to a price became the Ford mantra and although it was the making of the company it has also nearly cost it its very own existence. Even the unchanging Model T became a millstone when GM dazzled the market with annual model changes. The Ford Mondeo induced a similar fate on its parent, infecting the brand with a tawdry image as it was dragged down market by the Essex Man connection.


These days consumers are mesmerised by what used to be considered premium niche products. In 2006, Ford sold 135,240 Mondeos throughout Europe, a tidy sum by anyone’s standards. BMW, though, sold 292,578 of their supposedly exclusive 3 Series, well over double the mass market Mondeo. Audi’s A4 was also well ahead  and even the Mercedes C Class outsold the Mondeo. Ford was meant to have had its defences in place with Jaguar and Land Rover holding the high ground. In the event these two marques were little more than a Maginot Line as the German invaders swept round them.


This is not to say that Ford has not put up a stiff resistance. The last Mondeo showed that Ford understood how to take the fight to the usurpers with a machine of quality that exceeded its commonplace image. The new Mondeo has built on the technical achievements by winning accolades from all sides and proving that it can beat the German brands in the engineering of new products. But that is not the core of the car business: customers choose by burnished desire, not cold logic. The German companies are the masters of selling exclusivity by the truckload, while Ford is now struggling to make a mass market brand image appear aspirational. In reserve Ford only has Volvo to step into Jaguar’s place, but Volvo’s European sales are still too low to worry the likes of BMW and Audi. Ford is now in a desperate race to climb up the social ladder. If it succeeds then the new Mondeo will be the last of Essex Man, if it fails the new Mondeo will be the last of Ford.



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Ford and PAG
Longbridge Reopens
Salvation of Chrysler
Start a Car Company
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