The Fiat 500 is supposed to be one of Chrysler-Fiat’s big global brands, and its answer to BMW’s iconic Mini.But in the US, the Fiat 500 is off to a dismal start since launching in March, reports Larry Vellequette at AutoNews. It initially expected to sell 50,000 units in the first year, but so far, it’s only at 15,000. In fact, 29 of its 130 US stores didn’t sell a single one last month.
Why the crappy start?
Fiat CEO Sergio Marchionne blames the distribution network, not the car itself. He says that it has even less dealers on board than Ferrari this year, and it has been six months late to roll things out, according to Vellequette.
Some dealers are blaming the $16,000 vehicle itself, for being a small car with a not-so-small price. Dealers have spent millions investing in new brick-and-mortar facilities for Fiat and Alfa Romeo cars. But the Alfa Romeo launch has been delayed, leaving them with just the Fiat 500s for another year.
Other dealers say that they haven’t gotten enough help on the marketing side from Fiat. There were a couple advertising spots that ran nationally over the summer (including those Jennifer Lopez ads). One says that Fiat was targeting the wrong people — families are buying them as third cars, instead of the youthful student demographic that it wanted.
There are also questions about the launch of the Fiat brand as it reentered the US market. Here’s what Peter De Lorenzo at The Autoextremist had to say about Marchionne’s handling of it:
“It’s clear to me that Marchionne took his eye off of the ball when it came to Fiat and it has absolutely killed the launch of the brand. Leaving the initial launch marketing for the Fiat 500 grossly underfunded and undermanned without the kind of experienced, savvy people who were needed was a crucial mistake.
And Sergio’s extreme management style didn’t do the launch any favours either. He had too many other things to micromanage, meaning that he simply let Fiat slip through the cracks for all intents and purposes, which I’m sure makes Fiat dealers here in the U.S. – who shelled out millions to align with Sergio’s “vision” – deeply regretting that decision at this very moment.
Right now, Sergio & Co. has screwed-up the launch of the Fiat 500 so badly that they have to start over.”
Can Fiat and Chrysler recover from the botched launch? Of course, but it’s going to take some work, and there may be a management shakeup in the near future. Vellequette reports that Marchionne may reassign Laura Soave, the exec in charge of the Fiat brand in the US. At least Marchionne will have another shot at a big time launch in 2013 with Alfa Romeo.
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