Speaking at a press conference in Auburn Hills, Michigan, Fiat-Chrysler EMEA COO Alfredo Altavilla has confirmed the storied, 107-year old Lancia brand will be exclusively distributed on the Italian market where it will only sell the Ypsilon.
“[Our plan is to] reorganize the network coherently with Lancia becoming an Italy-driven brand,” explained Altavilla.
The news does not come as a surprise because company CEO Sergio Marchionne confirmed the company’s restructuring on the sidelines of last March’s Geneva Motor Show.
“We have curtailed our ambitions for Lancia, I’m going to be saying things that will hurt old Lancia people,” warned the executive in a March 2014 interview with British magazine Autocar. “The market has moved on and not every opportunity can be realized, we can’t cede to every demand. There will be some reshaping of activities and we need to make money.”
Lancia’s downfall can be attributed to a host of unfavorable factors including a non-competitive lineup that stems from decades of under-investment. The Ypsilon was the third best-selling car in Italy last year (which explains why Fiat is keeping it around) but the rest of the Lancia family sells poorly even in its home country, and the company barely managed to move 57,000 cars last year.
A second factor that has eroded Lancia over the years is that the firm is almost entirely dependent on the Italian market. Italy is still suffering from a severe economic downturn and government statistics indicate new car sales across the country have dropped by roughly 50 percent since 2007.
The brand’s relatively recent re-introduction to the United Kingdom under the Chrysler banner has done little to improve global sales and a return to the United States after a 30-year long hiatus is out of the question because half of the firm’s lineup was born with a Chrysler emblem on the grille. Finally, trying to set up shop in key Asian markets such as China is an uphill battle because Lancia has no resonance with local buyers.
A look back at history spells a worrisome future for Lancia in the medium term: nearly 20-years ago, the Autobianchi brand was slowly euthanized when Fiat’s top brass gave it a single model – a re-badged Lancia Y10, ironically – to sell exclusively within the borders of Italy.
While Lancia will continue to exist in Italy in the coming years, the brand’s future looks grim once the Ypsilon reaches the end of its career.