Fiat CEO Sergio Marchionne recently announced plans to introduce a low cost sub-brand for Fiat to rival the recently announced revival of Datsun brand by Nissan. According to the plan, the new low cost sub-brand will be set-up outside Europe to keep the manufacturing costs low. Marchionne believes that it will be profitable for the manufacturer to make a low cost car outside Europe than in the home market. The CEO added that the company is currently looking for a manufacturing capacity outside Europe to analyze the possibilities of setting up the low cost brand.
Fiat was looking forward to initiate a budget brand project from a long time but the project seemed to be less profitable. Now the budget brand project is back and Marchionne looks promising to work out the low cost brand project along with an aim to move the Fiat brand more upscale. Players like Nissan and Volkswagen are already working on their projects to introduce their low cost sub brands in various potential markets like India, China, Russia and Indonesia.
Nissan will roll out vehicles from the Datsun brand in Russia, India and Indonesia starting from the year 2014. Volkswagen is planning a budget car for the emerging markets within a price range of between 5000 to 10,000 Euros, which is expected to be built in China. Fiat is likely to revive its Innocenti brand taken over by the company in 1990. Sergio Marchionne looks promising to move the Fiat brand upscale and position a low cost budget brand under it, with cost effective measures of production.
Source – Auto News