re: Alfa and Ferrari

[Dana Loomis <dloomis@domain.elided>]

Tim Hancock, who describes himself as someone who "should be a natural FIAT
customer," but now prefers other brands, wrote that "when even the Italians
have lost faith in FIAT cars you need to think the unthinkable." 

The Fiat brand's slide must surely be related to both the maturation of the
new car market in Europe and the globalization of the industry.  For
decades, Fiat's strategy was to build basic cars for working people who had
never been able to afford an automobile before.  That kind of market
inevitably contracts over time, as everyone who wants a car gets one and
those who already have one begin to want better ones.  Now, the rules of
the current global economy also force Fiat to compete for that shrinking
market against manufacturers from countries with lower costs, like Korea
and Czech Republic.   

It's hard to imagine that there is any role left for a western European
manufacturer to play in Fiat's traditional, entry-level market.  It's no
wonder Italians, and perhaps others, have "lost faith in Fiat": those who
can afford a more upscale car can choose from those offered by most of the
world's manufacturers, while people who need a basic car can buy one made
in Asia or Eastern Europe for less money.  To survive, the Fiat brand must
either move up market or shift to countries where demand for their
traditional product is stronger and competition is weaker, but it may be
too late.
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