For the first time in the New Zealand market, Fiat Chrysler Group has launched under one distribution network. And it's promising to use its additional clout to get its Italian and American brands in front of Kiwi car buyers.
The new network is a 50-50 joint venture between Sydney-based New Zealand businessman Neville Crichton, the multi-millionaire automotive dealer and boating baron behind Ateco Automotive, which also distributes Chinese brands Great Wall, Chery and Foton trucks in New Zealand, and Australian Clyde Campbell. The company brings together Fiat and Alfa Romeo (Fiat also owns a controlling stake in Ferrari, but that's not part of the deal), with the American Chrysler, Jeep and Dodge brands.
“It is only by having one distributor for all the major Fiat Chrysler Group brands that New Zealand may fully benefit from all the strengths of the Fiat Chrysler Group,” says Campbell. “These include not just working with the Fiat Chrysler Group, but also the added clout of bringing all the brands together when it comes to operating in New Zealand, from buying advertising space to putting together the best dealer group to serve our customers. We also have another trick up our sleeve: we will be working as a team with Neville Crichton’s other company, Ateco Automotive New Zealand, in key areas such as purchasing, which means we can punch well above our separate weights."
According to stuff.co.nz, Ateco managed to take the distribution rights for the American brands off Sime-Darby, in exchange for Citroen (Sime Darby also holds its sister brand Peugeot). In Australia, where Crichton has made much of his fortune, Fiat Chrysler has taken back a significant chunk of the distribution rights and he has been forced to sell the rights in that market. But Crichton and Campbell have managed to retain the rights in New Zealand.
Globally, the Fiat Chrysler Group was formed in 2009 when Italy’s Fiat bought a controlling stake in the bankrupt Chrysler Group (Fiat is currently considering buying the remaining shares in Chrysler). From that date Fiat Chrysler has been working to ensure that all the benefits of the new company are applied in all areas of the world. And this has meant in many cases bringing together separate importers for the Italian and North American brands.
The second part of this process will see a repositioning of existing products to boost sales and this will be followed by new models arriving in New Zealand. But at a press conference a few weeks back Campbell agreed that the new company was brand rich yet product poor and it won’t have any new products to sell until 2014, so it has to work with what it currently has.
“The repositioning of the various models will not just be about price,” says Campbell. “It will be a combination of changes in specification, new variants and, of course, price, as we tailor each and every model and variant to meet the specific needs of the New Zealand market. We are able to do this through our greater buying power and lower operating costs as single distributor for all the Fiat Chrysler Group brands and products.”
Fiat Chrysler New Zealand is looking at three key areas of change for how the brands have done business in the past, described in its own words as place, promotion and pricing.
While the dealer group is being reorganised so it reflects the distributor, with all dealers representing all the brands in the group, there will also be a major increase in the brands’ representation in the digital realm. According to Yahoo! New Zealand, it has signed off on an $8 million digital advertising campaign. And Campbell confidently stated at the press conference that it will be among the top ten television advertisers.
"You will see us more than you’ll see McDonalds," he said.
Campbell says the research is very clear and the majority of customers now make their brand and product decision before they reach a dealership.
"Selling the company, the brand and its products—what the salesperson used to do in the showroom—now largely takes place on the internet as customers research their buying decision online. So we will be lifting our internet presence that is serving customers, dealers and even the media to new levels [at this stage, a search for Fiat Chrysler New Zealand doesn't offer too much of an internet presence, however].”
The company says New Zealand TV viewers can expect to see a lot more of Fiat and Chrysler products in coming months with a combination of the greater power of the new group buying airtime and a greater emphasis on television.
“Television is the most effective tool to alert customers to new products and prices,” says Campbell. "And it can then guide them to our enhanced internet presence where we and our dealers can clearly demonstrate that our products are the ideal choice for their customers’ automotive needs.”
Place also means a new, dedicated facility for Fiat Chrysler New Zealand, with a new HQ at Mt Wellington in Auckland that brings together all aspects of the business under one $8.5 million roof.
There has been substantial growth in the small car and 4WD/SUV sectors in New Zealand, and the company says that's good news, because Fiat is renowned for its small cars and Alfa Romeo adds a performance edge, while Jeep is a well-established player in the four wheel drive market and Chrysler and Dodge are renowned for their SUV/4WD and people mover crossover vehicles.
Last year, these brands made up around 1.5 percent of new car sales in New Zealand, compared to 3.5 percent in Australia. So there's certainly room to grow and the company hopes to sell 6,000 vehicles this year across the combined Chinese, American and Italian portfolio.
As far as agency relationships go, Republik handled the media and creative for Dodge, Jeep and Chrysler when those brands were under Sime Darby, but that's not the case anymore.
The creative for Fiat Chrysler is now thought to be coming from Melbourne and its media agency is Maxus, which is fronted by Ikon in this market and is part of a global alignment. Ikon also handles the media for Ateco's Chinese brands, with Obsidian on creative.
Fiat Chrysler's marketing manager Greg MacDonald has yet to return our call.