A Complementary Relationship Between Two TitansTue, 09/01/2015 - 11:55
Q: How has the creation of the FCA Group affected the success of each brand worldwide?
A: This alliance strengthens both companies. Our two product portfolios complement each other rather than compete, making us stronger in the global marketplace. However, the strength of each brand depends on the country. While Fiat is one of Brazil’s top brands, Chrysler, Dodge, Jeep, and RAM are much stronger in the Mexican market due to their history in the country. Similarly, even though Dodge Journey is highly successful in Mexico, we had to release it under the name of Fiat Freemont in Brazil. In other words, to potentiate our sales we have to predetermine which brand will release each product. The vehicles have to be tropicalized and undergo some minor modifications, but they are essentially the same original product. We can offer our clients added value with every single one of our products, which is one of FCA Group’s strengths. However, there are some products that stand out in the local market, such as the Grand Cherokee, the Dodge Journey, the Patriot, the Compass, and our entire RAM pickup line. Furthermore, we are the only automotive brand that has a line focused entirely on pickup trucks. Although having many products is a competitive advantage, we have to spread out our marketing efforts due to the peculiarities of our lines. For example, the North region is very keen on our light truck line, which means we have to direct most of our light truck marketing budget in that area of Mexico. Comparatively, the sedan line is more centralized in Mexico City, Guadalajara, and Monterrey.
Q: What are clients seeking when they consider purchasing a new FCA product, and which products are capable of meeting their needs?
A: Every client looks for high quality, world-class technology, safety, a competitive price range, and fuel economy. The Dodge Attitude, which was released in 2015, provides up to 27km per liter and it is currently the leader in terms of fuel economy. Previously we did not have a strong footprint in the entry segments, so we set out to change that with five product releases: Dodge Attitude, Dodge Vision, Fiat Uno, Mitsubishi Mirage, and Ram 700. Each of these products has excellent fuel economy and, although you could say that they all compete in the same segment, we have a clear strategy for each of them. Our products complement each other, which is an essential part of our strategy. In terms of our sedan products, we are in every market segment. This year, the Dodge Vision and Dodge Attitude are placed in the B segment, which is the biggest and most important segment in the Mexican market, and the Fiat Uno has done an amazing job entering the A and B segments as well. We are constantly renewing our product portfolio, and 2016 will not be any different. We see the release of these five products as an opportunity to expand our market share and brand recognition within those segments. The SUV market is also growing substantially and we have an excellent share with our Jeep product line. In terms of Alfa Romeo, the Giulia was recently released, and we will continue to release new products within the brand over the next few months. I am confident that Alfa Romeo will improve its position and that it will compete thoroughly with the market’s premium brands.
Q: How important is the Mexican market in FCA Group’s global sales and production strategies?
A: Mexico is extremely important for the FCA Group because of its geographic position, its proficient workforce, and tremendous infrastructure. We recently invested close to US$1.25 billion in a new assembly plant, and close to US$200 million in a component center in the State of Mexico. The group has important investment plans for the Mexican market and there will be some additional surprises for 2015. In terms of global numbers, close to 10% of the group’s production is done in Mexico and 20% of our engines are produced here.
The Mexican market is very complicated due to the multiplicity of brands and products, but we understand that constant product evolution is a must. Sales and service experience are also fundamental to creating a strong bond with clients, as well as giving our products an added value that is truly relevant to our demographics. Having such a good product line forces us to build mechanisms that will ease the migration from one product to another with higher specificities. The more complete our portfolio, the easier it will be to offer transitional options.