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the crisis of Lancia, a traditional Italian brand

If you can walk through the center of Turin, Italy, it is possible to find an avenue built in a partially glazed modernist building, those built during the “Italian miracle” of the 1950s. This is the Palazzo Lancia, built to house the company centenary of the same name that was once a symbol of the Italian automotive industry. He has been abandoned since the 1990s, interestingly the same period when she left the world of competition for good. Among enthusiasts around the world, the Lancia name translates into bold and exciting cars to drive, creating a certain nostalgia about the glory days of motorsport.

Lancia raised its name by participating in big races, especially in the rally.

Photo: FCA / Disclosure

Lancia raised its name by participating in major races, especially in the world of rally after entering the Fulvia, the first mass-produced car with a V4 engine, in 1965. However, it was after being sold in 1969 to its rival Fiat, in due to the accumulation of debts, that the brand reached its peak. Through the trio Stratos, 037, and Delta, the manufacturer won its biggest victories at the time of Group B. And even when it ended sadly in 1986, the brand remained in the sport for a few more years, cultivating the fame that lasts until today.

Lancia Ypsilon: bet on the segment of hybrid and electric cars.

Photo: FCA / Disclosure

But towards the turn of the century Lancia changed its course again. Even with the consolidated image among the public, they decided that exciting cars to drive were no longer attractive, and that dedicating their production to the premium car market was much more profitable. This makes perfect sense, however, instead of reinforcing their traditional appeal in this new segment, they decided to focus only on refinement and comfort to create a new identity, as in the case of the Dedra and Kappa sedans.

The strategy worked for a brief period, as the brand sold much more at this time, despite abandoning its old charm. However, after the 2008 economic crisis, the company suffered a terrible blow, worthy of those after a punch from Mike Tyson. Just at the same time, the Delta returned as an average family hatch, then manufactured on the Fiat Bravo platform. In 2011, with the formation of the FCA group after the merger between Fiat and Chrysler, the brand started selling renamed American models, a strategy that obviously did not work, since these were incompatible with the preferences of the European public. It’s like wearing your older brother’s used clothes for being in the grip, but as they have very different preferences and tastes, you are obliged to wear Renato Russo’s shirt, when you really wanted to be one of the Red Hot Chilli Peppers. Worse than that, only Aston Martin when it sold a Toyota iQ.

Lancia Fulvia Coupé: important participation in rally races.

Photo: FCA / Disclosure

It is no surprise that the popularity of the Italian has been going downhill. According to the balance sheet of the Car Sales Base website, the brand that registered 120 thousand license plates in 2009 suffered a drop of more than 50% in its sales in a decade.

Currently, Lancia has shrunk so much that it has closed its foreign branches, operating exclusively in Italy since 2014, as decided by ex-Fiat CEO Sergio Marchionne in order to wipe debts. Only one model is produced by the brand, the compact Ypsilon, mounted on the same platform as the Fiat 500. After Marchionne’s death in 2018, Italian-American John Elkann took over, reaffirming the FCA alliance, but this has not yet manifested itself on what is the future of Lancia, which so far remains in limbo.

According to autonews.com, in 2018, Chinese businessman Li Shufu, owner of automakers Geely and Volvo, showed interest in acquiring part of the FCA group after meeting with Elkann and members of the Agnelli family. Although the negotiations did not continue, even if Lancia was bought exclusively at the time (as was the case with the British MG Rover in 2005), the new direction distorts the image of the brand, completely detaching it from its historical legacy. Honestly, putting your name on the front grille of a Chinese car is torturing the spirit of the late Vincenzo Lancia, its creator. In any case, only the fact of the US-China trade war following the measures taken by the Donald Trump administration would make this plan go downhill, thankfully.

Lancia Delta: sharing the platform with Fiat Bravo in other times.

Photo: FCA / Disclosure

Although the whole scenario points to the end of the manufacturer, something feared by fans lately, but fully accepted by the lack of hope, the strategy of “regrouping” seems to be having some results. Ypsilon has stopped bleeding in recent years, according to the Italian press on the website motori.news, which has helped to give some survival to the brand in this turbulent situation.

Following the idea of ​​“evils that come for good”, with the rise of hybrid and electric cars, it is rumored that Ypsilon will win versions in this format, mainly with the European Union’s incentive policy to promote environmentally friendly cars (the called “EcoTax”), as stated by the Italian portal Mole24. Such a strategy would bring momentum and boost sales of the model, which fits within the urban vehicle segment, but nothing has been confirmed by the FCA group.

With the trio Stratos, 037 and Delta, Lancia won its biggest victories in the rally.

Photo: FCA / Disclosure

In the current scenario, one of the ways out for Lancia would be to undergo an identity reform that would reinvigorate the company’s name, returning to its sporting roots could give a new impetus, as has been happening at Alfa Romeo in recent years through models like the Quadrifoglio . However, this would conflict with other manufacturers in the house, such as Maserati, which are already competing in the sector, although it is also in decline. The rally world would be a good alternative, but for being away from the circuits for decades, this would require years of work and investment by the FCA until the first fruits were harvested.

Outside, economists and political scientists predict a new world crisis as a result of the Covid-19 pandemic, which is already reaching the entire automotive industry. At the end of this article, Lancia’s path continues to be a fog of doubts, rumors and uncertainties, the brand is between the cross and the sword at this moment. All that remains is to hope that the brand can resist tomorrow, while looking for a way out, which preferably brings the brilliance that one day already displayed in its name.

Alfa Romeo Stelvio and Giulia: inspiration for Lancia cars.

Photo: FCA / Disclosure

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