Has the Fiat Tipo found a completely new niche?
Source : Has the Fiat Tipo found a completely new niche?
For years, manufacturers have struggled to make a profit with C-segment cars within the fleet market, nevertheless Fiat’s Tipo could be about to buck the trend
Fiat’s completely new Tipo is usually one of the most intriguing completely new car projects for some years. along with which’s because which is usually trying to overturn conventional marketing wisdom within the most competitive segment of Europe’s cut-throat mainstream car market.
Instead of selling ever-plusher cars in an attempt to improve the brand’s value along with trying to convince punters to pay higher prices for mainstream versions, the Tipo project is usually an attempt to build a decent car at a sensible cost along with turn a decent profit.
Since the arrival in 1999 of the Golf Mk4 (known for its Internal along with outside build quality) along with the first Ford Focus (known for its exceptional driving dynamics), cars in which sector have become ever more upmarket.
The problem – which few within the industry ever talk about openly – is usually which what the average punter or fleet manager is usually willing to pay for a modern C-segment car is usually not enough to make a decent profit on such versions.
Although car makers never break out the figures – not even to City analysts – most cars in which sector do well to break even by European sales.
Indeed, one analyst friend of mine said which he thought most of the slim profits (if any) for mainstream European car makers came by the £500 supplement for metallic paint. Don’t laugh. Ten years ago even £250 for the optional CD changer was an important part of the economics of selling a sub-£18,000 car.
The struggle to make mainstream cars pay is usually a three-fold problem. Firstly, anything built within the European Union is usually relatively expensive because the hourly cost of labour is usually – globally speaking – quite high. Secondly, if the auto has also been engineered in Europe, the engineering costs are also elevated by western European wages. Thirdly, car makers are engaged in a battle to make their cars ever more refined along with well-specified. along with which costs money.
which is usually all very well, nevertheless if the average European buyer can’t – or won’t – pay list cost for a mass-market car, then the business case just doesn’t add up.
When I suggested to the boss of a European any which his cars were just too well specified he said: “Not at all. My customers want even more.” Well, yes, along with who can blame them if they get all which car for hardly more than which cost to produce?
Citroën was probably the first brand to break ranks on which content race with the C4 Cactus. By using an existing platform along with simplifying the auto’s construction which has got the entry-level 75bhp type down to a base showroom cost of £13,000, before any haggling.
along with while Ford does offer a base, 85bhp Focus at £14,000 (surely the definitive loss-leader), the cheapest regular Focus kicks of at £17,000.
The completely new Fiat Tipo saloon (the hatchback arrives later in 2016) is usually an attempt to slide into a gap between the back-to-basics Cactus along with the plush Focus using a car which doesn’t feel too basic or by devoid of the kit which European buyers expect on a completely new vehicle.
The 4.5m-long saloon variation of the auto has just gone on sale in Italy, at a launch cost of just £9000 for the 95bhp 1.4-litre petrol variation. which cost, however, is usually part of an ‘Opening Edition’ scrappage deal, where you bring in your old car to trade against the completely new Tipo.
According to the latest exchange rates, which entry-level Tipo will cost around £10,500 after the scrappage offer ends in a couple of months’ time. The standard spec includes automatic climate control, six airbags, bluetooth, 16in alloys along with fog lights.
A more upmarket Tipo equipped using a 1.6-litre turbodiesel engine will cost £12,000 including scrappage along with £13,500 otherwise. The Opening Edition spec on which type adds sat-nav, cruise, rear camera along with 17in alloys.
The completely new Fiat is usually being heavily advertised in Italy along with, as the completely new TV ad shows, the campaign’s pitch is usually which you can ‘live like a millionaire’. Or, at least, drive a well-specced car for less.
Fiat has been able to offer sensible showroom prices because the Tipo was both engineered along with is usually built in Turkey. which has kept the overall development costs much lower than if the auto had been engineered along with built in western Europe.
Assuming which these prices are preserved when the auto comes to the UK (which isn’t the safest of bets, admittedly) along with the Tipo is usually decently competitive to drive, which could be a car which finally breaks the 15-year mould of mainstream makers trying to sell ever more sophisticated along with complex cars which will never achieve the sort of transaction prices to make them solidly profitable.
Then again the popularity of buying cars through cheap monthly PCP deals along with the expectation of big discounts for private buyers could ensure which the completely new car buyers prefer to continue getting rather more car for their money, even if which is usually ultimately at the expense of many mainstream carmakers being able to make a return on their investments.
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