The Lancia brand was reborn today, just as its 100th anniversary celebrations wind up to a peak, Fiat Auto's senior management during a glitzy press conference in Venice promising the famous historic Italian carmaker bright new future as they laid out big plans - for new models and new markets - that are set to see it return to prominence across the global. For so long the "forgotten" name in the Fiat Auto Division's diverse portfolio of brands - and often overshadowed by events at Fiat, Alfa Romeo and Maserati - today was the day that the firm that Vincenzo Lancia founded in 1906, returned to public consciousness with ambition and in style.

The unveiling of the eagerly-anticipated C/D segment concept car as well as the new facelifted Ypsilon took place at the Teatro La Fenice this morning, Venice's historic theatre building bedecked with the famous Lancia insignia. As a major sponsor of the 63rd Venice Film Festival the Lancia name is everywhere in Venice this week, its cars ferrying the movie stars onto the red carpet at the Biennial and its logo emblazoned of the many huge banners strewn across the city.

The media arrived by Waterbus at Teatro La Fenice for the press conference on a damp, misty - but very warm - Venice morning. The senior Fiat management team, led by Lancia brand CEO Olivier François and Fiat Auto CEO Sergio Marchionne, as well as Giuseppe Bonollo, the Fiat Auto product chief and the head of Fiat Centro Stile, Frank Stephenson, were all present, joined by Fiat brand CEO Luca De Meo, and Antonio Baravelle, who holds onto a similar position at Alfa Romeo. It fell to François to introduce Lancia and give the assembled media a vision of its future, which he did - during an hour-long presentation - once a team of energetic dancers and a singer had kicked off the show.

The press conference got underway with footage from the 63rd Venice Film Festival, showing on a giant on stage screen and once the dancers had trailing a huge silken sheet over the heads of the media packed into this fabulous auditorium. François promised to "write the future of Lancia with complete fidelity to the brand's values and respect to its DNA." Venice - he said was the perfect venue for this press conference as "it emphasises our values: flair, style and glamour." He quickly mentioned the various initiatives that Lancia has undertaken on this anniversary year, and revealed that the recent Tour Italian Design - which travelled around major European cities - is now set to form the basis of a new - permanent - Lancia museum located in Turin. The film festival - continued Françoise - demonstrates Lancia's symbiosis with the world of cinema, and the recent TV commercial served to demonstrate this harmony completely. "In fact," he said, recounting a story doing the rounds, "film director Oliver Stone, who had seen the current TV adverts, joked that, when confronted with the news he world be travelling to his next appointment by water taxi, that he wanted a Thesis as he had heard that it could travel on water."

Delving into his presentation François expounded current Lancia's strengths on the Italian market, emphasising in particular that during August the brand posted its best sales results for 18 months; its continuing strength in the vital and hard-fought B-segment; and thus its inherent stability, a platform on which the future can be build. The Ypsilon, Musa and Phedra all hold commanding positions in their segments - B, L0 and L2 respectively - with around 15-20 percent each. In Italy - he said - Lancia has the image, the network and the management team to drive it forward. Commenting that around 1.5 million "Y" series models have been built, he focused on the craftsmanship involved in creating a Lancia, giving the fact that the bi-colore option is finished by hand as an example.

"The value of our customers is an important strength," continued Françoise, citing the fact that young peoples' purchases of the Ypsilon model are 29 percent above the average, and female buyers are 51 percent above this average also. "Lancia's assets," he said were style, prestige, personality and performance, "exactly the values that describe a premium brand."

Having looked at the positives, François focused on areas of improvement which would need to be tackled head-on if current volumes of around 120,000 units per year are to be raised to 300,000 by the end of 2010, an ambitious target recently laid down by Sergio Marchionne. The model mix is at present too focused on the Ypsilon (around 65 percent of sales) and needed to be expanded while the geographical split of sales (with 80 percent in Italy) needed to be addressed - he said - with a 60-40 split between Italy and the rest of the world being targeted for 2009.

Lancia were planning for the future - contended François - by emphasising a need for non-domestic growth and by a new innovative and premium customer service, with a dedicated European retail network, and brand exclusive sales staff. He confirmed that Lancia would enter the Russian and Scandinavian markets in 2007, with the UK and Japan quickly following in 2008. In fact - he said - potential candidate importers from these regions were in the audience today. Customer satisfaction was to be addressed from top to bottom, and Lancia had just commissioned respected US survey agency JD Power & Associates to perform a complete and detailed Italian customer survey and satisfaction report.

Customer service - said Françoise - was an overriding priority and in focusing on this area will be a new package, which has been christened VIP Service - which is set to be rolled out, initially on higher-specification Ypsilon range models, but eventually it will run across the whole spectrum. VIP Service will see a 2-year duration "door to door" package included in the price of the car purchase, including features such as service pick up and return to the customer's door whatever their location. This packages - believes François - is quite simply unlike anything currently offered on the market.

"We want to be noticed much more," said François, stating that sales to young people in particular needed to be addressed further, especially the Ypsilon to male drivers. "We need more gutsy styling and new interiors," he stated. With that the new Ypsilon was unveiled, the new model sliding out onto the stage astride a revolving turntable behind a troop of robot-like dancers. Addressing Frank Stephenson, François said: "Bravo, you have made this car even more beautiful." Four new engines will join the five-unit Ypsilon range: 1.4 8v 77 CV, 1.4 16v 95 CV 6-speed, 1.3 Multijet 16v 75 CV and 1.3 Multijet 16v 90 CV, while the entry price has been pegged at 10,700 euros. The new Ypsilon is expected to raise non-domestic sales of the B-segment model from an estimated 11,000 this year, to a targeted 16,000 in 2007. Four specification levels will each go after very different audiences: Y Argento will be the entry-level version; Y Oro Gallo will focus on female buyers; while Y Oro Blanco will target male customers; and Y Platino will fill the premium role, above 15,000 euros.

Communication would be another area to be targeted closely by Lancia's management and Milan design Stefano Gabbana has recently been enlisted to star in a new TV commercial spot. The famous designer usually turns down advertising work, but was persuaded to endorse the Ypsilon by his close friend François due to his long-term affinity with the Lancia brand. The Lancia CEO sees the Ypsilon model as a true "trendsetting icon" and the positive overlap with Gabbana - he believes - is an excellent synergy, as well as being one which will capture visual attention in the foreign markets.

Despite the upbeat presentation and detailed view of Lancia's rebirth, the star of the glitzy show this morning though was undoubtedly the new C/D Segment "concept car" titled as the the "Lancia Delta HPE Concept" which the media had come to see in the steel. Its name draws unashamedly on the evocative history of the brand, and this new concept car seeks to draw inspiration from the famous Beta HPE, setting itself very distinct and individual standards, a trait that has been prevalent right through Lancia's 100-year history. Sporty and luxurious - but at the same time thoroughly practical - creating a distinctly individual "driver's car" has always been the overriding Lancia philosophy.

This was the point François wanted to emphasise, and this was no concept - he was keen to point out - it will hit the showrooms during the second quarter of 2008. "2008 is assured," he said," otherwise we wouldn't have presented it here today."
 

Fiat Auto product boss Giuseppe Bonollo then took his turn at the lectern and told the media that Lancia's DNA runs right through this new car: its style, sense of on-board wellbeing and innovative use of sophisticated technology all serving to mark it down as a car in the finest traditions of the brand. "We like it," said Bonollo, "we hope you do too." Christening it as the Delta HPE has brought out its multi-faceted nature: all the feeling of a saloon car fused with the advantages of a station wagon was his unashamed view. Compact dimensions with a long wheelbase - said Bonollo - and the ability to manage space between the passengers and the trunk. It was a Lancia through-and-through, "the 'flying bridge' roof lends itself to a bi-colore finish and customisation," he pointed out, while also saying that the roof lining would "breathe" as well as assisting the search for greater soundproofing qualities. The Delta HPE will feature an all-turbocharged engine range with power "between 120 and 200 bhp, but above for petrol versions, and electronic suspension control."

The Lancia Delta HPE Concept is 4.5 metres long, 1.5 metres tall, and 1.8 metres wide. Visually it draws many of its outline cues from the Lancia "Granturismo" concept car from 2003 and the evolutionary "Granturismo Stilnovo" that swiftly followed it a year later, helping to develop Lancia's prevailing design themes of recent years. It is sleek, but at the same time imposing, full of very interesting individual details such as the headlights and tail lights. Comfort and convenience of travelling have been uppermost in the designer's minds, and so the interior is very spacious as the boot.

Oliver François returned to the lectern to comment that the Delta HPE concept had been just six months in the planning process, before turning to Fiat Auto CEO Sergio Marchionne, introducing him, and saying: "Thanks, you have given our brand a future." Marchionne initially dwelt on the historical significance of Lancia's 100th anniversary, commenting to the media that, "few have made it that far - a select club."

"The brand arouses strong emotions," Marchionne continued, adding that the Delta HPE Concept has been built by a great team, and that it has "all the hallmarks of a Lancia." Widening his subject he added: "We have redefined the mission of the Fiat brand, and in 2007 we will have the Bravo and 500, now we are redefining Alfa Romeo and Lancia to be complementary. Lancia has style and elegance, there is room in the market for Lancia and we are working to fill this room. We need to look to the European markets - and new markets."

"Lancia will be differentiated by a new approach to customers," he added, "and we are working with JD Power to reposition Lancia on the Italian market." He emphasised the work that would be needed as Lancia on has model representation in just 30 percent of market segments and a 6-fold increase in non-domestic sales would be an early target.  Further new models, in new segments, would extend the Lancia range - he continued, saying that "the first step towards a successful tomorrow is here today."

The press conference ended with a question-and-answer session with Marchionne first responding to a query about overlap between Lancia and Alfa Romeo: "Lancia's sportiness is infused with elegance" - while Alfa Romeo's is more raw sportiness. François then said that August's 4.8 pct year-on-year Italian market rise was partly down to discounting and greater advertising ahead of the introduction of the new model. He likened it to a sale at Prada, saying that "the brand reacts well to promotion," although adding that this was a tool to be used sparingly. He also sees Lancia achieving a 1-1.2 percent share of the European market by 2010, along with around 8 percent slice of the Italian market.

Asked by another journalist if the 300,000 units a year target was realistic, Marchionne said that the Italian market could absorb 30-35,000 new Delta HPE models a year, bringing it up to the targeted 150,000 per year, but that going from 25,000 to 150,000 units in the foreign markets initially looked like a "frightening leap". However the Japanese and Korean carmakers had managed this "so 150,000 in Europe doesn't really sound so frightening." The Delta HPE will take Lancia brand sales up to 180,000 in total - said Marchionne - who added that Fiat's Auto Division would apply technically innovative solutions across its brands in the quest for increased volumes, pointing out that the Delta HPE is based on a stretched Bravo floorpan. "Lancia will have other new products by 2008/2009," he stated.

Marchionne was asked if he had ever considered that Lancia might have no future? "When I arrived in 2004," he replied, "one of the biggest positives I had was meeting De Meo [then the Lancia CEO]. I was being hounded by people who said the future was questionable and I should drop it." It was also an industrial decision, he added, as he avowed not to close any plants and ditching Lancia would have involved at least one facility closing. "Lancia had decent margins but lacked volumes," he added. Dropping the brand without trying to find it space in the Italian market would have been "foolish" - continued Marchionne - who said it was in an "enviable position" and "he would continue to look for intelligent ways to find it breathing space, and the Delta HPE is the first example." The car was "no longer a concept" but the Delta HPE would require "time and patience" and that "the team is wagering on it, betting all the way on it being a success."

In a frank exchange Marchionne said that restoring Lancia's market position would be somewhat easier to accomplish than for the Alfa Romeo unit. "The Alfa brand is difficult to work with in terms of position as all its rivals are German so the Lancia brand is easier," he said. "The economic return on Alfa Romeo is yet to be proven," he continued, adding that: "the Alfa brand has absorbed most of the group investment."

One journalists asked that with all the talk being about Fiat, Lancia and Alfa Romeo - what about Maserati, what did its future hold? Marchionne stated that the new Maserati Coupé would arrive on the market in mid-2007 as would the Quattroporte with an automatic gearbox option. Marchionne sees the Maserati turnaround coming into view in a year's time, "then the bleeding will stop," he said. While focusing on Maserati he reaffirmed Alfa Romeo's US re-launch plans, saying that: "Alfa's 2008/2009 USA return is based on the compatibility of the two brands."

Finally Frank Stephenson, the head of Fiat Centro Stile was asked to comment on designing future Lancia models and the inspiration his team would seek. "It's a marque, more than a brand," he said. "There is a tremendous treasure chest of design ideas which we can develop," he added, "so we are not at a loss for ideas." The new Ypsilon and Delta HPE "are a sign that new energies are with us," he added, continuing on to say that "the HPE was developed in a very short time," and this the concept was undiluted. "Maybe it is better to do it this way as the idea is for pure development cycles." As for the future, "be excited and buy lots of stock," he concluded.

Finally questions that Lancisti have been asking were voiced by John Simister from The Independent. He asked about the lack of mention of sporty versions in the discussions, what had happened to the Fulvia concept car, and about plans for the UK re-launch. Marchionne stated that Lancia would link up closely with the Alfa Romeo dealer network on its return to the UK, but was vague on any possibility of an "Integrale" style version of the production Delta HPE, merely saying that Lancia would add products in the future that would be "reminiscent of the past." However it was on the subject of the Fulvia - a topic so dear to the hearts of Lancia enthusiasts - that he was much more upbeat, acknowledging the groundswell of positive opinion that this concept car invoked when it was shown in 2003. "I have never said I wouldn't build it," stated Marchionne, "it is the most likely project after the HPE, stay tuned - you may be pleasantly surprised." Adapting the concept's styling to fit onto a viable platform (the showcar was built on the outgoing Punto platform) has continued in the meantime, including a study of using the Alfa Brera's underpinnings.

by Edd Ellison in Venice