What comes to your mind if I say “Lancia”? Nowadays most of the people associate this brand with small cars and low market segmentation.
Would you believe me if I told you that in 1955 the Lancia Aurelia b24 would cost up to $5475 (equivalent of the current 52.104 euro)? It was the first model of the brand launched in the US market and it cost more than a Porsche or a Jaguar. For those years it was a huge amount of money.
And what if I told you that the same car was is now valued at $1.400.000 (1.633.167 euro)? So, what happened? What caused the crisis that led non only Lancia, but many other luxury car brands into failure?
1955 Lancia Aurelia B24 S Spider America by Pinin Farina
The slow brand decay was mainly dictated by financial and administration problems. The pressure of foreign competitors and the lack of resources to invest in technology resulted into a crisis from which the brand couldn’t re-emerge. The recent attempt of branding Chrysler cars with the Lancia logo caused a breaking point with the Lancia heritage and DNA.
As Lancia partent Fiat Chrysler Automobiles CEO Sergio Marchionne said: “Lancia will be a brand only for the Italian market. The brand is dead and it will hardly go back to its past image and glory. We will invest only in the Y model, focusing on sustainability. The brand has no appeal in the foreign countries. We have to abandon the idea of Lancia becoming great again.”
Production statistics show a decrease of production and sales during the ‘90s and the World Wars.
As for the ’90s, the reasons are wrong financial administration and the exit from the international racing world (causing disappointment and negative perception of the brand).
The World Wars have strongly compromised the automotive sector, with huge consequences not only for Lancia, but also for other brands such as Isotta Fraschini.
During those years, in order to survive, many car companies abandoned their core production and started creating trucks and aircraft engines. Also, several bombings destroyed factories and warehouses, making the recovery even harder.
If Lancia succeeded in relaunching its activity with new models that made history, Isotta Fraschini was not able to manage the many financial issues.
Even though the company was characterised by supreme quality, at the end of the WWII the requests for aircraft components were not many enough to support the project of a prestigious relaunch of the brand. Furthermore, after the war the potential clients for such expensive cars were really few.
After almost 50 years of glorious activity, Isotta Fraschini stopped production in 1949.
1930 Isotta Fraschini Tipo 8AS Bottail Cabriolet
In the mid ‘90s, thanks to investors and government funding, the brand tried to relaunch two models of cars (named T8 and T12) using respectively Audi and Ford engines.
The project was a total failure and was completely abandoned in 1999.
What remains of the brand is a new company, the Isotta Fraschini Milano. No other cars were produced and the main goal of the new company is to preserve the memory and to spread the allure of a glorious past.
Iso Rivolta is a brand founded in 1939. Someone of you may know the Isetta, the iconic egg shaped car that inspired the production of analogous microcar in Germany, France and Brazil (respectively under the brands BMW, VELAM and Romi).
Later on, Iso Rivolta changed its strategy and started the production of grand tourer cars.
The brand failed in 1974.
Why? For two main reasons: the 1973 oil crisis and stronger competitors.
An agreement with Philip Morris attempted to introduce Iso Rivolta to the Formula 1 competitions. Anyway, it was impossible for the brand to face the huge operating costs.
1965 Iso Grifo A3/C Stradale
These are just short analysis of what caused the decay of brands that used to be prestigious, luxurious and exclusive.
Isn’t it such a shame that pages of Italian automotive heritage are getting lost? Is it really that hard (or impossible) to invest in brands with great heritage, history, iconic and identitary features?
Foreign automotive groups recognise these values and are willing to spend millions for brands like these.
Going back to Lancia, in 2016 the Y model performed surprisingly well, selling +13.25%. With a quote of 13.8% it’s the most sold car of the B segment.
It’s too hard to predict what the future of the brand will be. A potential failure would destroy it for sure. However, strong and well planned investments could bring Lancia back to the old splendour.
Personally, I’d love to see the Blue Badge rock again.
Ministero delle Infrastrutture e dei Trasporti
Duemilaruote edizione 25 novembre 2016
Economia e Finanza larepubblica.it