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UK launch of Lancia put off

Lancia’s return to UK showrooms has fallen victim to the economic crisis, AM can reveal.

A review of the global credit crunch has led Fiat Group Auto executives to postpone the renaissance of their premium brand in right hand drive markets for an indefinite period.

In a brief statement, the group said the crisis had prompted the decision to delay the re-introduction beyond 2009. “We now need to monitor the situation carefully before giving a go-ahead to our plan for Lancia, but nothing else has happened apart from the timing.

“The plan for the brand to be sold from outlets in the Alfa network will still go ahead when conditions improve. For the moment, talks between Christopher Nicoll, our managing director, have been cancelled,” said a spokeswoman.

Total revision

Fiat had intended to use the latest Delta compact executive model to re-introduce the brand from sites selected from the 50-strong Alfa network in summer.

But in an interview, Fiat chief executive officer Sergio Marchionne described the crisis facing the industry as calling for a total revision of plans for the first part of next year.

“We’re just going to slam the brakes on, cut back to essentials. After that, we’re in the dark because I have no idea of future demand. We’re ready to weather this uncertainty, but it will not be easy.”

Marchionne said he had called a halt to the development of all models that had not already reached between 80 and 90 per cent completion.

“The replacement Alfa 147 is coming out, but we will not be investing in a new SUV for Alfa on our own. You need to produce at least 5.5 cars each year to make money. Fiat is not even halfway there and we’re not alone…by the time we get through this, we’ll end up with six mass producing automakers.

“We have to agree there is a new business model to run our shops. We should realise this business cannot continue as it did and is going to be completely different. Independence is no longer sustainable. I can no longer afford to spend half a billion euros on a platform…I can’t say I’m going to make a reasonable return on this investment because those days are gone.”

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