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Tue January 3, 2012
Fiat's First Year Back In The U.S. Marred By Missteps
After an absence of 27 years, Fiat cars are back in the U.S. But the launch of the Fiat 500 has been marred by missteps: Sales have fallen far short of expectations, while Fiat partner Chrysler is rapidly improving its U.S. sales. It could take some time for Fiat to once again find itself at home here.
Fiat of Lakeside in Macomb, Mich., used to be a Saturn dealership. Now it's transformed with chic Italian design, from modern lighting to black leather sofas to piping hot Italian espresso from a top-of-the-line machine. But so far, the cars are pretty much getting an American cold shoulder.
Dealers across the country managed for months with no national advertising for the car. When Fiat did roll out a TV commercial, actress Jennifer Lopez appeared to be driving a Fiat 500 through her old Bronx neighborhood. It's kind of gritty and genuine, like Chrysler's Eminem commercial.
Turns out, the commercial was mostly shot in Los Angeles and a body double was used for those Bronx scenes. Even so, Fiat of Lakeside sales manager Rick Foley thinks JLo is a fine spokeswoman to build awareness of the car. But what he needs is foot traffic.
"We need stuff that's local, stuff that's here in town, that's in Detroit," he says.
Those regional ads haven't rolled out yet. Dealers also have only one model of car to sell, the 500. Fiat has promised them more models in about a year — maybe a four-door Fiat, maybe an Alfa Romeo. But there's no question it's been a very tough year.
"You know, we had to make a lot of employee cuts and run off pretty much a skeleton crew, because, you know, the money, it's the money thing," Foley says. "We have to watch every dollar and cent."
Happy To See Fiat Again
While there's plenty of disappointment in the launch, Thad Kirk says Fiat's return is a vindication. He's vice president of Fiat Lancia Unlimited, a 1,000-member club for people who love Italian cars. Kirk says Fiat owners were resigned to being a castoff group when Fiat left in 1984.
"And we were going to muddle along with old [Fiat] cars and, you know, enjoy them to the best extent we could with no support from a company or from parts suppliers," he says.
So Kirk was among the first in line to buy a new Fiat 500, to add to his stable of three classic Fiats. He hasn't been disappointed by the car, which he thinks follows the Fiat tradition: fun to drive, economical and stylish.
"It's not a car for the masses; it's not going to be the next Toyota Camry or the next Honda Accord," Kirk says. "It's not intended to be that, either. There are certain people who will get it, and the people who get it will really like it and really have a good time with it."
Too Soon To Say?
It doesn't appear sales are being hurt by the old-timers' stereotype that Fiat cars broke down a lot. But the decision to sell the cars in totally separate Fiat dealerships — or studios, as they're called — did slow things down.
Aaron Bragman with IHS Automotive says maybe Fiat should have let existing Chrysler and Dodge dealerships sell the car. But he thinks the problems can be fixed. "It's not yet ... fair to say based on this past year, are they going to be successful or not, because frankly the rollout had some bumps," Bragman says.
He says he'd give the Fiat 500 through next year to prove itself. Meanwhile, Kirk is happy the U.S. has a modern example of the Fiat brand's endurance.
"A lot of the American ones have just vanished: Pontiac, Oldsmobile, all these classic American names are gone, and here's Fiat, you know. What the heck is that all about?" he says.
For Fiat, it's clearly about getting back into a hugely important car market in North America — another step in the plan to turn Fiat-Chrysler into one global player.