Steve Zanlunghi

FIAT Chrysler Automobiles (FCA) Australia is “coming off the bottom” and its poor sales in 2016 are to be turned around, said its new CEO and president Steve Zanlunghi.

The 43-year-old native New Yorker, who holds Australian citizenship and has a 18-year career with Jeep and FCA, has turned over 45 days on the job and is optimistic about the future of FCA’s brands in this country.

He has worked in countries including South Africa, the US and the UK and admits to using his experience in these markets to find the best plan to lift sales and appease dealers and customers in Australia.

“I have been here for 45 days and the first things I noticed was that we needed a plan for the brands and we needed to identify the brands,” he told GoAutoNews Premium at the launch of the Abarth 124 Spider.

“I like to poke around with ideas and see what happens. Personally, I know where we want to be, but I won’t make that public.

“Is it a brand by brand strategy – absolutely!

“These are little experiments and we’re going to see how they work.

“I have seen organisations getting complacent. Sometimes it’s hard to get continuity and when it’s cyclical business, it’s hard to see where you’re at.

“Right now, I see that we’re on our way back. I think we are coming off the bottom.”

Mr Zanlunghi said it was important to get clarity in FCA’s model range.

“It is not about separation, it is more about giving each brand a focus with clear lines,” he said.

“I have a clear idea of the Jeep brand.

“If our people don’t understand what Jeep stands for then how do our dealers understand what the brand stands for and then how does the customer understand what the brand stands for?

“So I put together a kind of brand program about Jeep and then took it to our advertising companies, our staff and then last week, I took our dealers through it. I will do the same with our other brands in the future.”

Though sales have spiralled down in Australia, Mr Zanlunghi said the dealers remain positive. Sales of all FCA products are down up to 71 per cent year-to-date compared with the same period in 2015.

He said that in Australia, dealers remained supportive and “are keen to try new ideas” and “it is a good partnership”.

“That wasn’t the case in the UK where we had to convince them (dealers) to stay (when sales fell in Europe),” he said.

Fiat 500

“It took a while for them to come onboard with new ideas.”

Mr Zanlunghi said the 2016 sales plunge compared with last year was a problem that was “hugely important to us”.

Asked if FCA was fielding the right product in Australia he said that “these (falls in sales) are due to headwinds including the currency swing”, referring to the rollercoaster Australian dollar.

“I know it has been used as an excuse but look at how it affects the UK market. For every 1 pence swing upwards against the Euro, it equates to 250 UK pounds per car more expensive on a 25,000 pound car.

“That’s not quite the case in Australia but the currency changes have made an impact.

“We are now seeing the dollar move the other way so now we can start being more aggressive with our pricing.”

Mr Zanlunghi said he had also introduced new initiatives to lift sales.

“We have just introduced free servicing for three years on selected models,” he said.

“We are aware of the cost of ownership of some models.”

Jeep Grand Cherokee SRT Night

FCA has been criticized recently for service costs. For example, the Chrysler 300 SRT costs about $1400 for its second service.

“We have introduced free servicing this week on four models – Jeep Cherokee, Grand Cherokee and Renegade and Fiat 500X – and that has been received extremely well by dealers,” he said.

“It led to Jeep having its best inquiry rate since June. We are looking at extending this to other models.”

Other initiatives being examined include finance.

“We probably have not previously taken advantage of financing,” he said.

“I have worked with our finance provider last week and there’s things we can do.

“There are also opportunities in fleet which is an area in which have not been strong previously.”

Mr Zanlunghi said he could bring any model from the FCA range into Australia “as long as I can make a business case”.

“It’s up to us to understand the market demands and whether we can make a business case.

“So, for me coming in. I understand our global portfolio and I’ll be the first to say we will take any opportunity to pick the right products to suit our market.

“I see new models as being suitable, but I won’t disclose that.”

Mr Zanlunghi – whose previous jobs with FCA included manning the customer call-centre – also faces pressure from disgruntled Jeep owners who have used social media to express disappointment with vehicle problems.

“I know about the problems but I think that there are individual cases that may have been blown out of proportion and that some people’s demands are not rational,” he said.

“There is more we can do and we have been working hard on customer satisfaction.

“I am treating this as Ground Zero and it’s the worst possible scenario,” he said of the reliability issues.

“We are working through it and there are a lot of internal initiatives with this.

“Design and manufacture is part of the problem. All cars break. It’s how you (the manufacturer and distributor) handle it.

“We have Stephane Lamari (FCA director of aftersales) who has some great ideas and is working on systems to reduce costs and problem areas.

“It seems like we are moving in the right direction and I like what I see.”

Fiat 500X

Mr Zanlunghi also reaffirmed that next year, Alfa Romeo will become a stand alone brand with its own showroom.

“My opinion is that if we have a brand with a strong business plan that can make it as a stand alone operation, then I don’t have a problem with that,” he said.

“For dealers, I am aware that this is an expensive thing to do.”

Alfa Romeo is being pushed up to premium status by FCA with the new Giulia sedan – due in Australia in with a wide variant spread – in February.

The brand will also introduce its Stelvio mid-size SUV later in 2017.

“On the other hand, Abarth is a brand that tunes Fiat products so we position it as an extension of Fiat,” he said.

“It does not have the ability to stand alone in Australia.

“It can, however, stand alone in the UK. The UK market is the world’s best market for Abarth. It sits in the corner of a Fiat showroom, but it is still a brand within the company.

“It’s too early to tell what we can do with Abarth in Australia.

“It has been aggressively priced for its release in Australia and I’m not going to say this is a huge seller in this company.

“But we have already boosted our order numbers by more than 50 per cent over what we initially planned.”

The Abarth 124 Spider is the upmarket variant of the Fiat 124 Spider that is a joint-venture development with Mazda, which markets it as the MX-5. Both the Mazda and Fiat-Abarth are made in Japan.

“We gauged demand and polled our network then talked to dealers and then looked at our features and then looked at where the volume was, and then we saw upside,” he said.

“The car doesn’t have many competitors in Australia.”

Mr Zanlunghi said the Abarth was a performance car and considered it a niche model.

“I’m not telling you I have grand plans about the car,” he said.

“I want to see how it is received first. But there is a business case and customer demand that will make us maximize our business case.”

By Neil Dowling