Fiat steps up a gear in drive to get Abarth on the road
By John Griffiths
Published: October 1 2007 03:00 | Last updated: October 1 2007 03:00
Fiat is preparing to relaunch the once-hallowed racing name of Abarth as its fifth brand after Alfa-Romeo, Lancia, Maserati and Fiat itself.
The italian carmaker is setting up an international network of dealers to offer high-performance versions of models such as the Fiat Grande Punto and new Cinquecento.
By 2010, the group should be preparing to launch specific Abarth models developed from the platforms - basic engineering structures - of others car in the group, Luca de Meo, marketing director, told the Financial Times in an interview yesterday.
The cars will bear only Abarth's distinctive red and yellow badge, overlaid by a black scorpion.
Fiat has spent €19m ($27m) developing the first, a high-powered version of the Grande Punto, which is about to go on sale in Italy for about €17,000. A similar version of the Cinquecento goes on sale next year.
Fiat has owned the Abarth brand since 1971. However, its serious financial problems, until its spectacular return to profitability in the past two years under Sergio Marchionne, chief executive, meant Abarth was largely unused in spite of Fiat being fully aware of its "heritage" brand potential.
"The problem was, when we were up to our backside in alligators, we couldn't afford to worry about scorpions as well," one Fiat executive said at the opening of Abarth's headquarters last week.
Mr de Meo said it was expected to sell 5,000 cars in the first year.
A significant proportion of revenue is expected to come, however, from the sale of high-performance conversion kits.
Fiat's research into the sales of such performance kits, which remains largely unexploited by carmakers, has concluded that the market is worth €12bn a year in Europe, where such sales are enjoying double-digit growth; €10bn a year in North America; and €4bn a year in Japan.
Most of this revenue goes to specialist independent suppliers. "Fiat has never really been part of it and we realised we wanted the opportunity to make money out of it," said Mr de Meo.
With profit margins in the sector up to three times that available from the sale of new cars, Abarth would become profitable within two to three years, he added.
Fiat is setting up a network of 35 Abarth dealers in Italy, with 60 more planned for the rest of Europe and some other markets, including Japan.
The Abarth brand will be launched in 12 countries this month, but Mr de Meo said it could be extended to many more - including China, where there is a booming market for small, high-performance cars and tuning.
Some 100 workshops and 40 specialised engine tuning centres are being set up in Italy tosell and install conversion and tuning kits and there are similar plans for other countries.
The rebirth of Abarth has been a priority for Mr de Meo since taking over as head of the Fiat brand more than two years ago.
He was recently appointed marketing director for the Fiat industrial group, including Iveco trucks, but will continue to oversee the Abarth name's future. "The big advantage for Fiat is that Abarth is a genuine heritage brand with a proud history so Fiat does not have to create anything. It was also already in-house, so we have only to exploit it."
Mr de Meo declined to say how much Fiat intended to invest in developing the brand over the next few years, but he said dealers were already investing enthusiastically in the separate showrooms that Fiat requires.
A separate Abarth manufacturing, design and management centre is being set up at Fiat's Mirafiori car plant. A flagship showroom has been built in central Turin, on the site of the original premises of Abarth's late founder, Austrian-born Carlo Abarth.
Fiat has been preparing the ground for Abarth's relaunch by entering cars in races and rally championships within Europe.
In the heyday of Abarth as an independent company in the 1950s and 60s, it was regarded with a similar level of respect as marques such as Maserati and Aston Martin by the international motor sport community.
Mr de Meo said Abarth was not expected to become as large a business as Fiat's Alfa Romeo or Lancia brands. Like Maserati, however, "we expect it to cast a halo effect across the whole company".
Copyright The Financial Times Limited 2007
By John Griffiths
Published: October 1 2007 03:00 | Last updated: October 1 2007 03:00
Fiat is preparing to relaunch the once-hallowed racing name of Abarth as its fifth brand after Alfa-Romeo, Lancia, Maserati and Fiat itself.
The italian carmaker is setting up an international network of dealers to offer high-performance versions of models such as the Fiat Grande Punto and new Cinquecento.
By 2010, the group should be preparing to launch specific Abarth models developed from the platforms - basic engineering structures - of others car in the group, Luca de Meo, marketing director, told the Financial Times in an interview yesterday.
The cars will bear only Abarth's distinctive red and yellow badge, overlaid by a black scorpion.
Fiat has spent €19m ($27m) developing the first, a high-powered version of the Grande Punto, which is about to go on sale in Italy for about €17,000. A similar version of the Cinquecento goes on sale next year.
Fiat has owned the Abarth brand since 1971. However, its serious financial problems, until its spectacular return to profitability in the past two years under Sergio Marchionne, chief executive, meant Abarth was largely unused in spite of Fiat being fully aware of its "heritage" brand potential.
"The problem was, when we were up to our backside in alligators, we couldn't afford to worry about scorpions as well," one Fiat executive said at the opening of Abarth's headquarters last week.
Mr de Meo said it was expected to sell 5,000 cars in the first year.
A significant proportion of revenue is expected to come, however, from the sale of high-performance conversion kits.
Fiat's research into the sales of such performance kits, which remains largely unexploited by carmakers, has concluded that the market is worth €12bn a year in Europe, where such sales are enjoying double-digit growth; €10bn a year in North America; and €4bn a year in Japan.
Most of this revenue goes to specialist independent suppliers. "Fiat has never really been part of it and we realised we wanted the opportunity to make money out of it," said Mr de Meo.
With profit margins in the sector up to three times that available from the sale of new cars, Abarth would become profitable within two to three years, he added.
Fiat is setting up a network of 35 Abarth dealers in Italy, with 60 more planned for the rest of Europe and some other markets, including Japan.
The Abarth brand will be launched in 12 countries this month, but Mr de Meo said it could be extended to many more - including China, where there is a booming market for small, high-performance cars and tuning.
Some 100 workshops and 40 specialised engine tuning centres are being set up in Italy tosell and install conversion and tuning kits and there are similar plans for other countries.
The rebirth of Abarth has been a priority for Mr de Meo since taking over as head of the Fiat brand more than two years ago.
He was recently appointed marketing director for the Fiat industrial group, including Iveco trucks, but will continue to oversee the Abarth name's future. "The big advantage for Fiat is that Abarth is a genuine heritage brand with a proud history so Fiat does not have to create anything. It was also already in-house, so we have only to exploit it."
Mr de Meo declined to say how much Fiat intended to invest in developing the brand over the next few years, but he said dealers were already investing enthusiastically in the separate showrooms that Fiat requires.
A separate Abarth manufacturing, design and management centre is being set up at Fiat's Mirafiori car plant. A flagship showroom has been built in central Turin, on the site of the original premises of Abarth's late founder, Austrian-born Carlo Abarth.
Fiat has been preparing the ground for Abarth's relaunch by entering cars in races and rally championships within Europe.
In the heyday of Abarth as an independent company in the 1950s and 60s, it was regarded with a similar level of respect as marques such as Maserati and Aston Martin by the international motor sport community.
Mr de Meo said Abarth was not expected to become as large a business as Fiat's Alfa Romeo or Lancia brands. Like Maserati, however, "we expect it to cast a halo effect across the whole company".
Copyright The Financial Times Limited 2007