Fiat’s re-entry into the Chinese car market seems startling on paper, in just a three year period they have developed a new partnership with Guangzhou Auto, built their own ‘World Class Manufacturing facility’ in Changsha, developed a car specifically for the Chinese market and built and expanded their dealership network to 134 dealers with the ultimate goal of 200 by the years end
The Nanjing-Fiat joint venture expired almost naturally, Nanjing was disinterested in the JV owing to the lack of investment by Fiat, and Fiat grew disinterested owing to the lack of enthusiasm for building ‘Developing World’ products in the Chinese market when it was moving out of a developing world market.
The new joint venture is full of promise; new leadership has been brought in such as GAC Fiat’s most recent appointment of British national John Burton to run the American-Chinese-Italian joint venture. John brings a new level of enthusiasm and experience to the young partnership, he has worked with some of the biggest names in the auto industry starting off with Austin-Rover and moving up the ladder to senior positions at GM internationally and then across to Fiat Chrysler.
John sat down with us at the 2013 Shanghai Auto Show to explain where GAC Fiat is going in these tentative early days. Chinese production of Jeep seems to be the hot topic, especially as the deceivingly handsome Cherokee was launched just a few hours previously on the stand across from Fiat, but what of other brands such as Chrysler and the creation of a GAC-Fiat sub brand? Jeep production in China is a foregone conclusion with John pointing out that the paint shop in Changsha has already been given considerable updates prior to any future Jeep model being sent down Chinese production lines.
Jeeps, and compact SUV’s in particular, are a hot commodity in the Chinese market with it the fastest growing segment to date – but it seems that Chrysler is getting the cold shoulder. Will Chrysler be produced in China? John says never say never. The handsome 300C is already on the market in China but as an import it is overly expensive against other luxury models such as the 3-Series and also the 5-Series. John says the same for any potential sub brand coming from the GAC-Fiat joint venture, whilst other manufacturers including GM, PSA and Honda etc have rushed to announce the creation or have already got sub brand cars on the road Fiat doesn’t seem ready to commit to yet another pre-production brand, all eyes are on Fiat and Jeep.
The Viaggio, as a sister car to the Dodge Dart, brings a little slice of Italian life to the Chinese market. Some engineering changes were made to the car for China, independent rear suspension has been nixed in favor of a torsion bar to lower costs and also a sole 1.4T engine which Michael Manley (Asia Pacific President for Fiat Chrysler) believes Chinese customers prefer to larger 2.0L and 2.4L engines offered in the Dart. Viaggio sales seem slow to start with owing to the restricted dealership network that currently stands at 134 dealerships but will be extended to 200 dealerships by the years end, the car also seems incredibly competitive against rivals such as the VW Sagitar 1.4T which starts at 120,000RMB whereas the Fiat is just over 100,000RMB, a bargain for those who live within a reasonable distance of a Fiat dealership.
Expanding the dealership network and improving Fiat’s marketing within China is key to improving sales, an issue which is acknowledged by John himself, however with a new car coming each year to the Fiat brand, Fiat are well placed to improve market share in China – when you start at nothing the only way is up.