Economy, Auto

Fiat Takes Aim at Renault's Dacia

Fiat Takes Aim at Renault's DaciaFiat Takes Aim at Renault's Dacia

Fiat is look to mimic the success of Renault's no-frills Dacia brand with its new compact car range based on the recently unveiled Aegea concept.

The production of Aegea will be frugal and practical just like Dacia's Logan sedan and Sandero hatchback, which are subcompact models, according to a new report from Auto News Europe. The Aegea will compete in Europe's compact segment where Dacia does not have an entry and could be sold in other emerging markets.

"Aegea will have no direct rival," said Alfredo Altavilla, Fiat-Chrysler's CEO in Europe. "It will be a test for the market because the [affordable compact] segment in Europe basically does not exist."

It will be positioned as an affordable, roomy and five-door car at the lower end of Europe's compact segment.

Fiat has not released pricing for the car but reports estimate it likely will start at €12,000, which aims for the lower end of the market but still at the top end of the budget group.

  Good Feedback

Altavilla said Fiat is getting good feedback for the car. "We showed it to Italian dealers; it went pretty well," he said.

Fiat unveiled Aegea as a sedan concept at the Istanbul auto show in May, a likely base for future production. The production version will go on sale as a sedan in Turkey starting in November followed by a rollout in 40 countries in European, Middle East and African markets.

Fiat will debut hatchback and station wagon variants at the Geneva Auto Show in March. The sedan variant will replace the Linea and will compete against cars such as the Peugeot 301 and Skoda Rapid in eastern Europe and Turkey where sedans are popular.

The hatchback will replace the Bravo and mainly sell in western Europe in the segment led by the Volkswagen Golf.

Fiat has not sold a wagon in Europe since the Stilo Multiwagon was discontinued in 2008.

The cars will be based on Fiat's small wide platform that also underpins the Fiat 500L minivan and 500X crossover, as well as the Jeep Renegade. Fiat has not yet disclosed the production name for the compact family. Media reports have said it will be dubbed the Egea.

The compact family will be built at Fiat's Tofas joint venture plant in Turkey. Tofas has said it will build a combined 700,000 units of the range over the life cycle of the vehicles until 2023, mainly for export.  IHS Automotive predicts that production of the three body styles will peak at 124,000 during 2018.

  Iran Could Be Profitable

Fiat has intimated it is looking to push ahead with its plans to sell new cars in the Iranian market.

Previous attempts at importing the Linea market fell flat considering their high price point on entry due to import tariffs of 100%.  The Aegea format would sit well in the mix of Iranian cars, as low-cost sedans are preferred in Iran. Hence, if the vehicle were to be offered in the Iranian market, it would have to be produced here to keep the price competitive.