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Is Fiat leaving US dealers high and dry?


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After the near implosion of the US Domestic Auto Industry, Fiat rode in to rescue Chrysler Group from certain death. While many skeptics, myself included, worried that Fiat CEO Sergio Marchionne was simply interested in taking over Chrysler's established network of dealers, their actions so far show at least a passing interest in seeing Chrysler, Dodge, Jeep, and Ram remain alive and well.

 

As part of their turnaround plan, Fiat announced that their marquee brand would return to the US in the form of the tiny and funky Fiat 500 microcar. The A-segment vehicle, which shares a platform with Ford's European market Ka, looked to be quite a well rounded package, but many of us worried it was simply too small for American tastes. Fiat and Marchionne refuted that idea, and set a first-year sales target of 50,000 units. Reality hasn't been kind to the Italians since then.

 

Through October, Fiat has only managed to move 15,826 500s, or roughly 30% of their goal. While new trim levels and packages are still being rolled out, supply has far exceeded demand. There is currently a half-year supply on the lots. 29 of their 130 dealers didn't sell a single 500 in October. This isn't to say that the 500 is a bad car: It's actually a very good car that happens to be too small for an American volume product.

 

LINK - The Alternator Blog

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I would say I find it hard to believe the dealers didn't know the risks. On the other hand, I have seen how some dealerships are run. So nothing surprises me.

 

I would suspect that most or all of the owners of exlusive Fiat dealerships own very profitable tier one auto dealerships and have the deep pockets needed to take this risk. And they probably can hang in there to see what Marchionne does eventually to bring bring help as in more models. Probably the most immediate help would be $4-$5 gas next summer. Everytime gas prices fall it seems as though small vehicle sales plummet and SUV/CUV/Pickup sales increase significantly. The American public doesn't have a long term memory.

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I would suspect that most or all of the owners of exlusive Fiat dealerships own very profitable tier one auto dealerships and have the deep pockets needed to take this risk. And they probably can hang in there to see what Marchionne does eventually to bring bring help as in more models. Probably the most immediate help would be $4-$5 gas next summer. Everytime gas prices fall it seems as though small vehicle sales plummet and SUV/CUV/Pickup sales increase significantly. The American public doesn't have a long term memory.

 

Can't disagree here....your probably right.

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Probably the most immediate help would be $4-$5 gas next summer. Everytime gas prices fall it seems as though small vehicle sales plummet and SUV/CUV/Pickup sales increase significantly. The American public doesn't have a long term memory.

 

Gas sure as hell didn't get up to $4 a gallon in my area this past summer...if it goes up to $5 bucks a gallon, well the wheels are going to come off the economy and nothing is going to happen.

 

People don't buy crappy product...thats what it boils down too.

 

There was a shift back in 2008 to smaller products, but I don't think people are going to downsize that much because a car the size of the 500 is pretty pointless for a family of 4...

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Gas sure as hell didn't get up to $4 a gallon in my area this past summer...if it goes up to $5 bucks a gallon, well the wheels are going to come off the economy and nothing is going to happen.

 

People don't buy crappy product...thats what it boils down too.

 

There was a shift back in 2008 to smaller products, but I don't think people are going to downsize that much because a car the size of the 500 is pretty pointless for a family of 4...

 

Please clarify your view - is it crappy because it doesn't really hold 4? Or is it crappy for another reason? The Mini Cooper is a great small car, but the original one really did not really hold 4 either.

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Please clarify your view - is it crappy because it doesn't really hold 4?

 

The 500 isn't good product for the USA...at least the Mini had some history here before it was reintroduced to North America.

 

The other part of the crappy comment is that people aren't going to downsize to an A class car unless they want to or really have too.

 

Keep this in mind:

 

A car that gets Avg of 33 MPG vs one that gets 38 MPG is only a difference of $197 bucks a year (@ $3.25 a gallon) in gas...or less then $4 a difference a week!

Edited by silvrsvt
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I like the car, but the marketing is SHOCKINGLY bad...J Lo?...seriously ??????, that pertains its a total Chick car from ground zero...AWFUL AWFUL AWFUL.....and mentally that will KILL sales to men, and may cause such damage as to be completely crossed off their lists....nicwe way to halve a potential audience Fiat,. Also, they need a broader range, just one niche car wont cut it..........

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Many reasons for sales figures......

1. Fiat still has a reputation of building a crappy (mechical/electrical) vehicle (rated #34 of the 35 vehicles sold in EU)

2. This is the 1st time in years FIAT has had vehicle it thought could be sold in terms of quality in the US

3. It is butt ugly and the paint quality , well, the cheapest Honda has a better paint job on it and that's not saying very much.

4. For the price, I can buy almost any brand vehicle that is faster, better quality (in every aspect) & looks better than this for the same or less money

5. Given the economy, the price of this car is targeted for the 20 something crowd who likes JALO...just one little problem, her personal life is being proudly displayed in public....many parents just aren't buying (and kids today) her "Personal viewpoints"; 2ndly her professional singing career was on the skids year ago which is why she left the US market for overseas, even then only selling 700,000 units internationally at best.....which means regardsles of her marketing, her followers are dimished proportionly, and the remainder of the blind following 20 somethings who in good times would typically buy a product because JALO has it, well, they don't even have a pot to pee in (so to speak)....they can't get a job, their parents are just scraping by if they are lucky and oh, school....that isn't happening either as collee loans just about don't exist anymore.........so who needs a small car, and a crappy looking one at that marketed by a "Professional Singer" who on their own websight professesses to be something that 99% of people when they read that go.........is she "nuts"

Edited by beechkid
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To younger buyers, under 40, they may never heard of Fiat, there is no name recognition, and the J Lo ads sell her not the car.

 

The idea that they were "too good" to sell at a Mopar dealer was bad, so few dealer groups bought in. Chicago area only has 2 or 3 Fiat stores!

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To younger buyers, under 40, they may never heard of Fiat, there is no name recognition, and the J Lo ads sell her not the car.

 

The idea that they were "too good" to sell at a Mopar dealer was bad, so few dealer groups bought in. Chicago area only has 2 or 3 Fiat stores!

 

Last week, the marketing manager who is a woman and behind the J Lo ads was fired and replaced with a guy who has dealer relations business experience. We will see what changes are made and how effective they are. I would suspect the advertising will change direction markedly. No matter what new direction the advertising takes, I would guess that the 500 is and will be a chick's car much like the modern VW Beetle was. No matter, I do like seeing VW Beetles on road and hope there are more 500's on road. They do improve the rather bland automotive landscape, especially now with new vehicle sales being off the last few years and more older vehicles on road like in 70's and early 80's.

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Many reasons for sales figures......

1. Fiat still has a reputation of building a crappy (mechical/electrical) vehicle (rated #34 of the 35 vehicles sold in EU)

2. This is the 1st time in years FIAT has had vehicle it thought could be sold in terms of quality in the US

3. It is butt ugly and the paint quality , well, the cheapest Honda has a better paint job on it and that's not saying very much.

4. For the price, I can buy almost any brand vehicle that is faster, better quality (in every aspect) & looks better than this for the same or less money

5. Given the economy, the price of this car is targeted for the 20 something crowd who likes JALO...just one little problem, her personal life is being proudly displayed in public....many parents just aren't buying (and kids today) her "Personal viewpoints"; 2ndly her professional singing career was on the skids year ago which is why she left the US market for overseas, even then only selling 700,000 units internationally at best.....which means regardsles of her marketing, her followers are dimished proportionly, and the remainder of the blind following 20 somethings who in good times would typically buy a product because JALO has it, well, they don't even have a pot to pee in (so to speak)....they can't get a job, their parents are just scraping by if they are lucky and oh, school....that isn't happening either as collee loans just about don't exist anymore.........so who needs a small car, and a crappy looking one at that marketed by a "Professional Singer" who on their own websight professesses to be something that 99% of people when they read that go.........is she "nuts"

 

I don't disagree. However, you did leave out she (JLO) is in millions of households who watch American Idol.

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Have a Fiat dealer about 2 blocks from the house. They have a good 20-30 on their lot, and I have yet to really see any move. Have only seen one on the road, and couldn't say if it was an owner or someone taking a test drive.

 

The Mini Cooper is a great small car, but the original one really did not really hold 4 either.

Hmm. The original, maybe not. But the current 2-door Mini my cousin and a fellow co-work of mine fit 4 adults okay. Nothing you'd want to take on an extended trip though. A family of 4 (2 adults & 2 kids under 13 or so), it does just fine. The biggest issue for the Mini is the high priced repair bills. The 500 doesn't have the looks, size or sportiness that the Mini provides.

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Hmm. The original, maybe not. But the current 2-door Mini my cousin and a fellow co-work of mine fit 4 adults okay. Nothing you'd want to take on an extended trip though. A family of 4 (2 adults & 2 kids under 13 or so), it does just fine. The biggest issue for the Mini is the high priced repair bills. The 500 doesn't have the looks, size or sportiness that the Mini provides.

 

The 500 is at least as roomy for four as the Mini, perhaps more so. It's a very space-efficient package. The only cars it doesn't rival for interior space are the ones that are much larger on the outside.

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The 500 is at least as roomy for four as the Mini, perhaps more so. It's a very space-efficient package. The only cars it doesn't rival for interior space are the ones that are much larger on the outside.

I concur, much like the mini the wheels are at the extremities....read almost zero overhangs.......

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