(update with comments on Tata)
VENICE (AFX) - Fiat SpA plans to sell 300,000 Lancia cars a year by the end of 2010 compared with 120,000 in 2005 by offering a wider range of models and expanding the sales network outside Italy, company officials said.
'Current Lancia volumes are not enough to guarantee the future of the brand and international expansion is needed,' said chief executive Sergio Marchionne at a presentation to journalists and car dealers of the restyled Ypsilon and new model, New Delta.
He also said that the production target was achievable and would generate a margin of more than 4 pct on sales, in line with the group's target of a 2-4 pct margin.
Currently, 65 pct of the Lancia sales stem from one model, the B-class Lancia Ypsilon, and 80 pct of the total sales are in Italy, said Olivier Francoise, head of the Lancia brand.
Francoise said that foreign contribution to Lancia sales is targeted to exceed 40 pct in 2009.
Network development actions are planned in Russia and in Scandinavia in 2007, and in the UK and Japan the following year due to adjustments for right-hand drive.
He also said that Lancia wants to attract new customers by offering innovative post-sale services.
The restyled version of the Ypsilon will go on the market in Italy in the coming weeks, followed shortly by its release abroad, with prices ranging from 10,700 eur for the basic model to over 15,000 eur.
Full-year 2007 sales of the Ypsilon are targeted to reach 85,000 units, 15,000 abroad, up from the 68,000 expected for 2006, Francoise said.
Marchionne said production of the New Delta, the new C and D-class premium vehicle, is due to start by the first half of 2008.
The production target for the New Delta is 60,000 units, 30-35,000 of them in Italy.
He added that Lancia is currently studying 'the technical and economic feasibility' of other models, which will be launched in 2008-2009.
After the launch of the New Delta the group expect to introduce a Flavia coupe, Marchionne said.
Marchionne added that Fiat will rapidly decide whether to produce a low-cost vehicle with the Indian group Tata.
Tata has 'worked a lot' on low-cost cars and Fiat could contribute its know-how and capital to the project, he said.
The partnership with Tata is far-reaching and could involve initiatives outside India, he said.
The two groups are examining the possibility of producing vehicles at Fiat's Argentine plant at Cordoba, and the results of the feasibility study are expected in 60-90 days, Marchionne said.
In July, Fiat and Tata signed a letter of intent to co-operate in India on production of cars, motors, and gearboxes for the Indian market and for export, as well as study possible industrial and commercial cooperation in Latin America. danilo.masoni@afxnews.com pw/cml COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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