Fiat’s Got Troubles

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History may be about to repeat itself – for Fiat.

The Italian automaker’s first U.S. model since 1987 is apparently a flop … so far, at least.

According to The Detroit News and DailyTech, only about 12,000 Fiat 500s have been sold to date – which is barely a fourth of the 50,000 units annually projected by Fiat management.

But this time, it’s probably not the car that’s the problem.

Small, fuel-efficient – and fun – cars are very much in. Minis are moving – despite some significant early teething problems with quality control. The Mazda3’s popular, too – and it’s only slightly larger than the 500.

The difference?

The dealers.

In Fiat’s case, there aren’t any. Or rather, there are far too few.

In Virginia, for instance, there are only three Fiat stores – and they’re all clustered in Northern Virginia within 50 miles of downtown Washington, DC. Two of them – the Vienna, Va. and Alexandria, Va. stores – are within 20 miles of each other.

This means that anyone potentially interested in a 500 who doesn’t actually live within the DC Beltway is very likely going to cross the 500 off their list simply because it’s too much of a hassle to go look at one. Let alone face the prospect, down the road, of having to do overnight (or at least, all-day) drives to a dealership that’s 100, 150 or 200 miles from home.

I did a little checking and it’s easier to find a Porsche dealer in my part of Virginia that it is to find a Fiat store. There’s one here in Roanoke – 200 miles away from Northern Virginia. The closest Fiat store to me is in Richmond – a three hour drive (one way) away.

Now, I really like the 500. In fact, I like it better than the Mini – because it’s just as cute and equally fun to drive but costs $4,000 less ($15,00 to start vs. $19,500). It also gets 2-3 MPG better gas mileage than the Mini. For the money, it’s hard to beat. And money notwithstanding, the 500 is a neat little car; a low-cost runabout that’s highway-viable (unlike the idiotic SmartCar two-seater) but not a depressing little shitbox, either. There’s a lot of afrermarket support for these cars and Fiat sells a hopped-up Abarth version that I’d be very interested in.

But I would not buy one because of the dealer scarcity-remoteness issue.

And it’s madness for Fiat management to believe anyone other than the most dedicated, gotta-have-this-car people will, either.

I mean, would you?

Porsche can afford to be hard-to-get. It is an iconic brand and Porsche-o-philes would probably be willing – no, happy – to crawl on their hands and knees for 100 miles merely for the privilege of being permitted to enter a Porsche dealership. And then pay full MSRP plus 10 percent.

Fiat can’t do that.

In fact, Fiat management ought to know it must do precisely the opposite. That is, do the equivalent of crawling on its hands and knees to potential customers, in order to entice them into giving the 500 – and Fiat – a shot at their business.

Remember: This is a brand that most Americans  under 45 have no living memory of. Or, they have bad memories of.  As in Fix It Again Tony.

To overcome that – to get people to even look – you’ve gotta make it easy as well as enticing for them to do so. Make it hard and – well, forget about it.

Right?

The part that really mystifies is that Fiat – the new owner of Chrysler – has access to Chrysler’s vast dealer network. Indeed, access to Chrysler’s vast dealer network was, reportedly, the only real reason for Fiat’s investment in the otherwise belly-up Chrysler brand. Yet Fiat decided, for reasons I cannot fathom, not to sell the 500 through the existing network of Chrysler dealers.

Of which, by the way, there are many.

Or at least, a sufficiency.

We have two in or near Roanoke. Two more in Richmond. Five more – from what I dug up – in Northern Virginia. And of those five, three are spread out roughly mid-way between Roanoke (at the southern end of the state), Richmond (in the middle) and Northern Virginia, near DC. Most people interested in looking at or test-driving a new Chrysler, or Jeep or Dodge can find a dealer within an hour (or even a half-hour) of where they live. Very few would need to drive more than about 50 miles to do so.

So, why not Chrysler-Jeep-Dodge-Fiat?

I wanted to ask Laura Soave, the Fiat North America honcho. Except she just got fired.

I wonder why… .

Throw it in the Woods?

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13 COMMENTS

  1. Not ONE dealer in all of Texas?

    One is supposed to be starting up in Houston, according the the fiat usa site. (A solid 4 hour drive from here.) But if you look at the fiat 500 site, and enter Texas as your location they show nothing to you, just encourage you to order on-line.

    So how do you get service on-line? Trades?

  2. Vincent brought up J-Lo in passing. Sad to say, it’s true. Once the word got out about those commercials Ms. Lopez did for the 500, people saw the whole thing as a put-on.

    As far as Virginia goes Fiat has added dealers in Norfolk, Fredericksburg and Newport News to meet demand.

    • Well,

      The outcome of all this is up in the air.

      Chrysler has a history of being associated with brands that it introduces, but not support. They ultimatly fail, and parts are hard to get, and service unubtainable. In the 1960s, Simca. In the 1970s, Plymouth Cricket. In the 1980s, they did better. They associated with Mitsubishi. That company was strong enough to do the heavy marketing to become established here.

      Mercedes-Benz bought and rescued Chrysler. That marriage went sour, and they sold to Fiat.

      I was sad when a French company that failed in the USA bought Nissan. I thought Nissan would go down the tube. That company, Pugeot, managed to revive Nissan. Still, Pugeot is not trying to import their cars to the USA.

      Malcom Bricklin also had a history of importing cars, but abandononing service when the business failed. The Subaru 360 comes to mind. Subaru does not support those cars. Later in, he was the guy who introduced the Yugo….. He even brought in his own car… The Bricklin. This was sort of like the Delorean,but much cheesier. Parts? Service?

      The people who buy a FIat now are taking a big risk. If things work out, they will have parts and service. If not, they have continued car payments on yard art.

      Toyota and Datsun (Nissan) sputtered here for some time before they got it right.

      As for me, I will wait ten years. If Fiat is strong here, and once the 500 has a reliable track record, I might be interested.

      • Agree.

        And given how much more competitive the market is now than it was 20 or 30 years ago, how much less willing the average buyer is to put up with anything (whether from the car or the dealer) before jumping ship (or, if he hears about bad stuff beforehand, not even considering that make/model) Fiat had better get things right, pronto.

        I like the car, personally – and hope the company succeeds.

  3. Here is a guess about why Fiat has chosen not offer the 500 for sale through most Chrysler dealerships. Fiat may fear that most Chrysler dealers are not prepared to effectively sell or service this little car. And they could be right.

    Quite the dilemma. Perhaps their best shot at success for this car is to take the slow route, rather than cause bad customer experiences with unqualified dealers. But they better try hard to make more of those Chrysler dealers “qualified” in the near future.

    • That’s a good possibility, but if it’s the case, then Fiat made a big mistake bringing the car here before they were ready to properly market and distribute it. It’s going on two years now and the 500 is no longer “new.” Newness is critical to success in this market. Not just because of trendiness, though that’s a big factor – but also because new competitors crop up almost every year. In just the past year, for example, Ford brought out the excellent Fiesta and Mazda is now bringing out the SkyActive (40 MPG) version of its little 3. There’s also the new Scion iQ. By next year, there will probably be another couple of entrants in the subcompact segment, all either newer (with features not offered in the 500) or with an established brand identity that will automatically bring in customers. I don’t think Fiat can afford to dick around like this. Two or three years of weak sales will probably result in Fiat leaving the U.S. market…. again.

  4. I have my doubts that Fiat really wanted to succeed with the 500. Fiat/Chrysler is doing very well selling SUVs, the very type of vehicle that the Prez and his minions didn’t want them to sell. Fiat got Chrysler on a platter because they promised to sell the 500 here. It then took them over a year to get things up and running to sell the car. Perhaps they were told that nobody here would be wild about the car, J-Lo or not, and they could use the losses incurred as a tax writeoff. Then Fiat would be able to tell Obama, “Gee, Paisan, we tried.’, and then continue selling the hated yet profitable SUVs and trucks.

    • Could be.

      But I wonder…

      There does seem to be decently strong demand for small, fuel-efficient cars. The Mini is one. So also the new Ford Fiesta and its cousin, the Mazda3. Surely people considering those cars and cars like those cars would potentially be interested in the 500… it’s similar… it’s cute/fun… and it costs less. Etc.

      I don’t see anything fundamentally wrong withe concept.

      On the Chrysler/Jeep/Dodge SUVs: They’re very appealing, but in this economy, and with gas prices still at $3 per (and people reasonably concerned about them rising at any moment) I’d be concerned, if I were Fiat, about the near-term future of these vehicles. There’s also the pending 35.5 MPG CAFE uptick to take into account.

      I’d like to see the whole enchilda succeed. I like the 500 – and I also like the current Chrysler/Jeep/Dodge truck/SUV lineup, too.

      • Fiat’s executives must be sitting on their collective asses. This car should rule the ECO world. Less is more!

        Why I even saw one of these in the country in WANGARATTA Victoria Australia.
        Why not really promote it!

        • I agree. They have a great product – but the marketing and distribution is not up to par. If it’s not fixed quickly, this may do irreparable harm to the brand’s image in the U.S.

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