A few years ago, the brokerage firm Sanford C. Bernstein published a study about the most loss-making cars in the automotive industry. Behind the indestructible Smart ForTwo which had cost its manufacturer 3.35 billion euros, came the Fiat Stilo, produced from 2001 to 2009, which will have cost its manufacturer more than 2.1 billion euros, and caused a unprecedented crisis for the Fiat empire.
Bravo and Brava are in a boat
To understand the failure of the Stilo, you have to go back a few years with the previous generation of Fiat compacts, the Bravo and Brava. In the 90s, the manufacturer marketed two rather original cars, a rather sporty three-door called Bravo, and a five-door called Brava.
At launch, everyone salutes the originality of the two versions and the duo seems set for a great career. The bellows will quickly fall. The arrival of the Ford Focus in 1998 and fierce competition from the Volkswagen Golf got the better of FIAT’s commercial ambitions. But the management of the Italian brand already has an idea in mind.
FIAT goes all out
Aware of the shortcomings of its models in terms of perceived quality or interior finish, Fiat leaders are ready to review their modus operandi for the 192 project. The stakes are high, compact sedans being the essential segment of the European market. To succeed, Fiat will release three versions, a dynamically styled three-door sedan, a five-door and a family station wagon.
For the heart of the range, the five-door, supposed to compete with the Golf, FIAT does not lack ideas. The builder felt the tide turn. The success of minivans proves that customers want modular cars, with lots of space, but also technology.
A car ahead of its time
The idea is to design a slightly raised sedan, with the conveniences of a minivan. The Stilo is equipped with a brand new modular platform, very practical because it makes it possible to design a car that is taller and longer than the three-door, but also very expensive to design. In the back, the seats are divided and sliding.
Fiat’s press kit at the time even mentions a folding front passenger seat “for long loads or to make the rear seat a lounge chair”. Just that. The same passengers could also take advantage of tablets. The driver of a top-of-the-range version could receive a GPS with a color screen, an MP3 player or even a concierge system.
Unheard of at the time at this level of the range. The Stilo could also receive a panoramic sunroof, adaptive cruise control, electric seats, automatic air conditioning or eight airbags.
A disappointing vehicle
From the launch, however, the specialized press was disappointed. The five-door Stilo is criticized for its total lack of charisma and style, its sad interior using low-end materials, its archaic rear axle and the absence of driving pleasure. Worse, the sporty Abarth version inherits a slow and outdated Selespeed automatic transmission.
But the main problem with this Stilo is poor marketing targeting. While the manufacturer has spent crazy sums for its GPS, its Connect system, and its panoramic sunroof, most buyers refuse to put this price in a Stilo and are content with the entry and mid-range. After a few months the observation is bitter. This car does not sell, the Stilo is a bitter failure.
The Stilo makes Italy tremble
After a few months on the market, sales were so far below forecasts that Fiat offered the manufacturer Rover, itself in difficulty, to resell its “revolutionary” platform to it and produce the future English cars in the FIAT factory. At the time of reckoning, the situation is catastrophic. In Italy, FIAT is in the red,
thousands of bewildered employees block the roads and airports of the peninsula. The Berlusconi government multiplies the declarations to “save the FIAT”. As for the Agnelli family, it is torn about the future of its auto branch. Some family members want to sell the automaker, but to whom? The General Motors group, a partner of FIAT, is itself deeply in debt.
In 2002, the brand’s losses were around 2 billion euros. Analysts estimate that the project 192 which gave birth to the Stilo will have made FIAT lose 2.1 billion euros… The Agnelli family decides to sacrifice the managing director Paolo Cantarella, considered responsible for the Stilo file. But it will not be the only victim of the compact sedan.
After cutting 6,000 jobs at the end of 2001, FIAT quickly announces 3,000 other job cuts in Italy before negotiating with the government a third plan of 8,100 additional job cuts. FIAT got away with it, but lost the compact market for good. The next 20 years will be devoted to the new FIAT 500, which fortunately will save the brand.