Dealers A bumpy road for Fiat 500
11-21-11, 08:52 PM
#1
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Dealers A bumpy road for Fiat 500
Another case of I told you so.....
Also if you are not aware (since the US News is not talking about it) Fiat is having serious issues in Europe in regards to everything from sales, to labor to income.
Read below..guy says 20k in two countries is a triple
yet the goal is 50k..if its not even 1/2 way there (a double) how can it be a triple?
Also if you are not aware (since the US News is not talking about it) Fiat is having serious issues in Europe in regards to everything from sales, to labor to income.
Read below..guy says 20k in two countries is a triple
yet the goal is 50k..if its not even 1/2 way there (a double) how can it be a triple?
Chrysler Group is sharply outperforming the market this year, has charted a healthy course to profitability and has paid back its government loans.
But the small, peppy Fiat 500 hasn't kept the same pace.
The Italian subcompact is well behind the 50,000-unit annual target once envisioned by Sergio Marchionne, the Chrysler-Fiat boss. Since sales began in March, only 15,826 were sold through October.
And last month 29 of Fiat's 130 U.S. stores didn't sell a single one.
Internal Chrysler Group documents obtained by Automotive News show that, based on current selling rates, Fiat had roughly a half-year supply of Fiat 500 coupes and convertibles on Nov. 1. That's 13,730 units, almost as many as have been sold since March.
In an effort to get things moving, Fiat began offering a $500 cash rebate this month.
But the move comes too late to stave off production cutbacks. This month, because of slack demand, Chrysler laid off or reassigned 65 workers who build the engine for the Fiat 500 in Dundee, Mich.
Today, Chrysler parted ways with Laura Soave, 39, a former marketing executive with both Ford and Volkswagen, who became head of the Fiat brand in North America in March 2010. She left the company to pursue other interests, Chrysler said in a statement.
The automaker named Timothy Kuniskis, 44, to replace Soave as head of the Fiat brand for North America. He had been director for both the Chrysler brand and Fiat brand product marketing, the company said, adding that the move is effective immediately.
The launch of the 500 was a key part of Marchionne's plan to reintroduce the Fiat brand to North America and give Chrysler Group a subcompact.
When Marchionne took over Chrysler Group in 2009, the smallest, most fuel-efficient vehicles the domestic automaker had were the compact "triplets" -- the Jeep Compass and Patriot and Dodge Caliber, none of which got more than 30 mpg on the highway, and all of which sold poorly.
Chrysler hired Jennifer Lopez to pitch the 500 in a series of national TV commercials and asked dealers to build expensive separate showrooms to reintroduce Fiat in North America.
So what's the problem?
Are sales slow because U.S. drivers don't want a car that small, or because Fiat has been too slow in rolling out its dealerships?
Marchionne doesn't blame the car. Some dealers do.
"The distribution network is probably half a year late," Marchionne told reporters last week on the sidelines of a Chrysler event in Toledo, Ohio. "We need to continue to work on distribution."
Marchionne said Chrysler had "50 dealers or 60 dealers" for most of 2011. "I think Ferrari has more dealers than that," he said.
Marchionne said the company underestimated the time it would take dealers to finish work on their stores.
Major investments
Instead of allowing existing Chrysler Group dealers to open Fiat sections in their showrooms, Fiat required the dealers to sign separate franchise agreements and eventually open separate facilities, which can cost as much as $3 million.
Most Fiat dealers also have Chrysler dealerships. They could build temporary facilities in their existing stores but were required to erect separate, permanent stores by the end of 2012.
Chrysler said last week that it had achieved its goal to open 130 Fiat stores this year.
But dealers who have made major investments in new showrooms say the biggest sales obstacles are the 500's petite size and less-petite price.
The base Fiat 500 sells for $16,000, including shipping.
"We have customers that feel the car is really cute, and they wanted to see it, but they say they wouldn't buy a car that small," said David Rovny, general sales manager at Reedman-Toll Fiat in Langhorne, Pa. "People are expecting the car to be less expensive because of the size."
Some dealers sold as few as 49 cars from March through October, while others sold as many as 370, according to Fiat's Final Daily Sales Report for Nov. 1.
Olivier Francois, the Frenchman and former Chrysler brand chief who recently became global head of the Fiat brand, said a comparison of days supply is unfair with a new brand.
"A brand in the launch phase is not the same as a brand that has been around for 85 years," Francois said on the sidelines of the Los Angeles Auto Show, where Fiat unveiled the North American version of the Fiat 500 Abarth, a high-performance version of the two-door subcompact. The Abarth features a turbocharged 160-hp version of the 1.4-liter engine built in Dundee.
Sales of the 500 peaked at 3,106 units in August and fell below 2,000 in October. Francois attributes the fluctuation to the "seasonality" of the brand.
And sales of similar-sized cars aren't booming either. Through October, Mini sold 33,760 Coopers in the United States, down 12 percent from the same period of 2010. Sales of the Honda Fit are up 12 percent to 50,790 units.
Of the 130 Fiat stores in operation, 101 reported sales in October. Those 130 stores averaged 15 sales per franchise, according to the internal report, while Mini's 97 dealers averaged 56 sales per franchise and Honda's 1,034 dealers each averaged 3 sales of the tiny Fit.
Not enough marketing
Some dealers say Fiat was slow to give them marketing support to make customers aware of the car. This summer Fiat responded by increasing its advertising presence with a couple of TV spots, including one featuring Lopez, and beefing up its marketing and dealership teams with a couple of veteran Chrysler managers.
"I don't think we have a car problem; people love the car," Francois said in an interview with Advertising Age. "I think we have an awareness problem."
Dealer Rovny sold 57 units of the 500 from March through October. He said the 500 has generated sufficient interest among consumers, but perhaps not in the demographic that Chrysler targeted.
"We're finding a lot of the more established customers are buying them as third vehicles in the household, as opposed to the students and young people that Chrysler initially targeted," Rovny said. Reedman-Toll holds franchises for all Chrysler Group brands, as well as Chevrolet, Lincoln, Mazda, Subaru, and Jaguar, with the franchises side by side.
The Fiat 500's strongest markets are in California and the Southeast, according to the internal report. Dealers in the Midwest, from Ohio to Colorado, are experiencing the slowest sales rates, selling about 13 vehicles each in October, compared with dealers in California, who averaged almost 29 sales in October.
Although sales are well below Marchionne's original targets, Reid Bigland, Chrysler's lead U.S. sales executive, said the Fiat brand is helping Chrysler.
"Between Canada and the United States, we've sold close to 20,000 Fiats," he said. "Although maybe it's not a home run, it's very close to it -- a solid triple from my perspective. It's a product that has zero cannibalization of any other Chrysler, Dodge, Jeep or Ram product. It's purely incremental and has been a decent profit contributor to the sales organization. It depends on whether you look at the cup as half empty or half full. To me it's half full."
Read more: http://www.autonews.com/article/2011...IL07/311219964 <meta name=#ixzz1ePGj1gyZ
But the small, peppy Fiat 500 hasn't kept the same pace.
The Italian subcompact is well behind the 50,000-unit annual target once envisioned by Sergio Marchionne, the Chrysler-Fiat boss. Since sales began in March, only 15,826 were sold through October.
And last month 29 of Fiat's 130 U.S. stores didn't sell a single one.
Internal Chrysler Group documents obtained by Automotive News show that, based on current selling rates, Fiat had roughly a half-year supply of Fiat 500 coupes and convertibles on Nov. 1. That's 13,730 units, almost as many as have been sold since March.
In an effort to get things moving, Fiat began offering a $500 cash rebate this month.
But the move comes too late to stave off production cutbacks. This month, because of slack demand, Chrysler laid off or reassigned 65 workers who build the engine for the Fiat 500 in Dundee, Mich.
Today, Chrysler parted ways with Laura Soave, 39, a former marketing executive with both Ford and Volkswagen, who became head of the Fiat brand in North America in March 2010. She left the company to pursue other interests, Chrysler said in a statement.
The automaker named Timothy Kuniskis, 44, to replace Soave as head of the Fiat brand for North America. He had been director for both the Chrysler brand and Fiat brand product marketing, the company said, adding that the move is effective immediately.
The launch of the 500 was a key part of Marchionne's plan to reintroduce the Fiat brand to North America and give Chrysler Group a subcompact.
When Marchionne took over Chrysler Group in 2009, the smallest, most fuel-efficient vehicles the domestic automaker had were the compact "triplets" -- the Jeep Compass and Patriot and Dodge Caliber, none of which got more than 30 mpg on the highway, and all of which sold poorly.
Chrysler hired Jennifer Lopez to pitch the 500 in a series of national TV commercials and asked dealers to build expensive separate showrooms to reintroduce Fiat in North America.
So what's the problem?
Are sales slow because U.S. drivers don't want a car that small, or because Fiat has been too slow in rolling out its dealerships?
Marchionne doesn't blame the car. Some dealers do.
"The distribution network is probably half a year late," Marchionne told reporters last week on the sidelines of a Chrysler event in Toledo, Ohio. "We need to continue to work on distribution."
Marchionne said Chrysler had "50 dealers or 60 dealers" for most of 2011. "I think Ferrari has more dealers than that," he said.
Marchionne said the company underestimated the time it would take dealers to finish work on their stores.
Major investments
Instead of allowing existing Chrysler Group dealers to open Fiat sections in their showrooms, Fiat required the dealers to sign separate franchise agreements and eventually open separate facilities, which can cost as much as $3 million.
Most Fiat dealers also have Chrysler dealerships. They could build temporary facilities in their existing stores but were required to erect separate, permanent stores by the end of 2012.
Chrysler said last week that it had achieved its goal to open 130 Fiat stores this year.
But dealers who have made major investments in new showrooms say the biggest sales obstacles are the 500's petite size and less-petite price.
The base Fiat 500 sells for $16,000, including shipping.
"We have customers that feel the car is really cute, and they wanted to see it, but they say they wouldn't buy a car that small," said David Rovny, general sales manager at Reedman-Toll Fiat in Langhorne, Pa. "People are expecting the car to be less expensive because of the size."
Some dealers sold as few as 49 cars from March through October, while others sold as many as 370, according to Fiat's Final Daily Sales Report for Nov. 1.
Olivier Francois, the Frenchman and former Chrysler brand chief who recently became global head of the Fiat brand, said a comparison of days supply is unfair with a new brand.
"A brand in the launch phase is not the same as a brand that has been around for 85 years," Francois said on the sidelines of the Los Angeles Auto Show, where Fiat unveiled the North American version of the Fiat 500 Abarth, a high-performance version of the two-door subcompact. The Abarth features a turbocharged 160-hp version of the 1.4-liter engine built in Dundee.
Sales of the 500 peaked at 3,106 units in August and fell below 2,000 in October. Francois attributes the fluctuation to the "seasonality" of the brand.
And sales of similar-sized cars aren't booming either. Through October, Mini sold 33,760 Coopers in the United States, down 12 percent from the same period of 2010. Sales of the Honda Fit are up 12 percent to 50,790 units.
Of the 130 Fiat stores in operation, 101 reported sales in October. Those 130 stores averaged 15 sales per franchise, according to the internal report, while Mini's 97 dealers averaged 56 sales per franchise and Honda's 1,034 dealers each averaged 3 sales of the tiny Fit.
Not enough marketing
Some dealers say Fiat was slow to give them marketing support to make customers aware of the car. This summer Fiat responded by increasing its advertising presence with a couple of TV spots, including one featuring Lopez, and beefing up its marketing and dealership teams with a couple of veteran Chrysler managers.
"I don't think we have a car problem; people love the car," Francois said in an interview with Advertising Age. "I think we have an awareness problem."
Dealer Rovny sold 57 units of the 500 from March through October. He said the 500 has generated sufficient interest among consumers, but perhaps not in the demographic that Chrysler targeted.
"We're finding a lot of the more established customers are buying them as third vehicles in the household, as opposed to the students and young people that Chrysler initially targeted," Rovny said. Reedman-Toll holds franchises for all Chrysler Group brands, as well as Chevrolet, Lincoln, Mazda, Subaru, and Jaguar, with the franchises side by side.
The Fiat 500's strongest markets are in California and the Southeast, according to the internal report. Dealers in the Midwest, from Ohio to Colorado, are experiencing the slowest sales rates, selling about 13 vehicles each in October, compared with dealers in California, who averaged almost 29 sales in October.
Although sales are well below Marchionne's original targets, Reid Bigland, Chrysler's lead U.S. sales executive, said the Fiat brand is helping Chrysler.
"Between Canada and the United States, we've sold close to 20,000 Fiats," he said. "Although maybe it's not a home run, it's very close to it -- a solid triple from my perspective. It's a product that has zero cannibalization of any other Chrysler, Dodge, Jeep or Ram product. It's purely incremental and has been a decent profit contributor to the sales organization. It depends on whether you look at the cup as half empty or half full. To me it's half full."
Read more: http://www.autonews.com/article/2011...IL07/311219964 <meta name=#ixzz1ePGj1gyZ
11-21-11, 11:10 PM
#2
Lexus Test Driver
Several of us predicted the same thing. People were not asking for this car, yet here it is. To make matters worse, it's not even that attractive. Then, naming a car "Abarth" (A-Barf) is a proof enough this company has no clue about doing business in the U.S. Failure is deserved and a lesson needs to be learned.
Overall, the Mini already covered this territory. Those who wanted a small, chic runabout already have what they need.
Overall, the Mini already covered this territory. Those who wanted a small, chic runabout already have what they need.
11-21-11, 11:21 PM
#3
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Whether or not the cars are any good its easy to see why they are failing.
1) Too high of expectations. MINI was an excellent example to build off of in terms of number of cars to sell per year, but Fiat decided to try and build WAY too many cars.
2) Dealerships didn't exist even when the cars hit the lot. The network to sell the cars didn't exist at the beginning of this year, and forcing franchises to build or obtain SEPARATE buildings for the brand was a mistake for such a niche car.
3) Advertising didn't exist even when the cars were being shipped. This J'lo add campaign needed to be 6 months ago, when the cars were first being shipped, so demand can be increased BEFORE the cars are actually being sold. Demand dictates supply, not the other way around, economics 101.
Is there hope for Fiat in the U.S.?
Yes there is. They have PLENTY of good models they can sell over here other than the 500. They need to diversify more in order to sell more cars than a brand like MINI or Smart.
1) Too high of expectations. MINI was an excellent example to build off of in terms of number of cars to sell per year, but Fiat decided to try and build WAY too many cars.
2) Dealerships didn't exist even when the cars hit the lot. The network to sell the cars didn't exist at the beginning of this year, and forcing franchises to build or obtain SEPARATE buildings for the brand was a mistake for such a niche car.
3) Advertising didn't exist even when the cars were being shipped. This J'lo add campaign needed to be 6 months ago, when the cars were first being shipped, so demand can be increased BEFORE the cars are actually being sold. Demand dictates supply, not the other way around, economics 101.
Is there hope for Fiat in the U.S.?
Yes there is. They have PLENTY of good models they can sell over here other than the 500. They need to diversify more in order to sell more cars than a brand like MINI or Smart.
11-21-11, 11:25 PM
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Naming it anything other than Abarth would be a travesty, it is after all the equivalent of TRD for Toyota. There is nothing else it can be called.
11-21-11, 11:30 PM
#5
This car is just too damn expensive!
From my post in another thread:
I can see why people aren't buying it...
From my post in another thread:
I just can't see how people justify it!!! Check out the sticker price!
Comparable in price to a Prius 4 (next to highest model!!!)
... yet it has WAY less MPG.
Comparable in price to a Prius 4 (next to highest model!!!)
... yet it has WAY less MPG.
11-22-11, 12:20 AM
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Thats a Lounge Convertible model (top of the line) with the automatic. Of course its that expensive!
The mileage is due to the crappy auto trans. The mileage with the manual transmission is quite good.
The mileage is due to the crappy auto trans. The mileage with the manual transmission is quite good.
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11-22-11, 01:05 AM
#8
Lexus Test Driver
This isn't a cheap small car.
It's an expensive small car--a concept that's still very foreign to Americans.
(Have y'all spec'd out a Fiesta lately though?)
The Fiat 500 really isn't for people looking at Point A-to-Point-B transportation. It's a toy. There are many other cars better at hauling more people and things in better comfort at better prices.
Is the Fiat 500 a car appropriate for majority of America? Not really.
Does the dealership network suck? Yes.
Marketing and advertising? Kind of mis-timed.
The local dealership here had cars on the lot even before the dealership was finished
It's an expensive small car--a concept that's still very foreign to Americans.
(Have y'all spec'd out a Fiesta lately though?)
The Fiat 500 really isn't for people looking at Point A-to-Point-B transportation. It's a toy. There are many other cars better at hauling more people and things in better comfort at better prices.
Is the Fiat 500 a car appropriate for majority of America? Not really.
Does the dealership network suck? Yes.
Marketing and advertising? Kind of mis-timed.
The local dealership here had cars on the lot even before the dealership was finished
11-22-11, 07:14 AM
#10
Super Moderator
I feel sorry for Fiat at this point. The first car I really knew growing up were two little Fiat sedans belonging to my parents in rural New Jersey. Quite reliable then. I then got to see these vehicles again when I lived in Mexico. They weren't very common on the road and rarely did one show up at our 1/4 mile track. And the Fiats that are sold in the U.S. come from just over the mountains to the west of Mexico City in Toluca.
-----------------------------------------------
Here's an oddity that I remember and found funny when Obama decided to run for President. It's a Fiat dealer in Mexico City with the name Obama, that comes from a play on words of the initials of the dealership owner Oñate Baron Mario, OBaMa, and the name has been there since the dealership opened in 2006, click here to see it in Google Street View
I test drove a few Fiats at that dealership when I lived there.
-----------------------------------------------
Here's an oddity that I remember and found funny when Obama decided to run for President. It's a Fiat dealer in Mexico City with the name Obama, that comes from a play on words of the initials of the dealership owner Oñate Baron Mario, OBaMa, and the name has been there since the dealership opened in 2006, click here to see it in Google Street View
I test drove a few Fiats at that dealership when I lived there.
11-22-11, 07:52 AM
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I actually like the little thing and hope it does well.
Here in San Diego I've seen quite a few driving around, but not as many as I thought I'd be seening on the road by now.
The main problem is that it is NOT a family car. Back seat is only for luggage or pets. It works as something for a single person or couple with no kids and is quite fun.
Advertising (especially TV) should have played to the Italian sports car vibe and history instead of the J Lo fashion accessory theme.
Here in San Diego I've seen quite a few driving around, but not as many as I thought I'd be seening on the road by now.
The main problem is that it is NOT a family car. Back seat is only for luggage or pets. It works as something for a single person or couple with no kids and is quite fun.
Advertising (especially TV) should have played to the Italian sports car vibe and history instead of the J Lo fashion accessory theme.
11-22-11, 08:37 AM
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This car is being marketed as if it's a fashion accessory, like a purse or necklace. The J-Lo adds are completely bogus. As if she actually drives around in one of these little things.
In the end, the car shows no virtue in smallness other than to just be cute. At least the Mini has a performance edge to so that small = agile and fun. People haven't bought the Fiat because there's no compelling reason to spend good money on it.
11-22-11, 09:01 AM
#13
Lexus Fanatic
While I can't speak for the entire country, as far as the D.C. area is concerned, I have to disagree with a number of the above comments. Though I don't have a hard figure yet, the 500 is selling around here in significant numbers (I see more and more of them each day). I reviewed one last April https://www.clublexus.com/forums/car...iat-500-a.html and found the dealership to be superb...friendly, extremely well-stocked with EVERY 500 model and color (and 14 different colors are offered), clean, and with impressive-looking service facilities. That was one of the first Fiat dealerships to open up in this area (there are a few more now), though dealer-coverage, admittedly, is sparse or non-existant in some areas. I also found the 500 fun to drive and reasonably well-assembled (especially compared to the last American-market Fiats of 30 years ago). And as far as sticker-price goes, most of the ones I saw then ran from 16 to about 20K....certainly less-expensive than its closest U.S.-market competitor, the Mini-Cooper. The 26K model shown above is probably for a loaded convertible or Abarth model, as regular 500s start at $15,500.
There were some plans for an all-electric 500 here in the U.S., but Fiat still seems undecided on it.
There were some plans for an all-electric 500 here in the U.S., but Fiat still seems undecided on it.
11-22-11, 09:15 AM
#14
This car is being marketed as if it's a fashion accessory, like a purse or necklace. The J-Lo adds are completely bogus. As if she actually drives around in one of these little things.
In the end, the car shows no virtue in smallness other than to just be cute. At least the Mini has a performance edge to so that small = agile and fun. People haven't bought the Fiat because there's no compelling reason to spend good money on it.
In the end, the car shows no virtue in smallness other than to just be cute. At least the Mini has a performance edge to so that small = agile and fun. People haven't bought the Fiat because there's no compelling reason to spend good money on it.
)Why would anyone get this over a mini is beyond me.
11-22-11, 09:31 AM
#15
Lexus Champion
This car is being marketed as if it's a fashion accessory, like a purse or necklace. The J-Lo adds are completely bogus. As if she actually drives around in one of these little things.
In the end, the car shows no virtue in smallness other than to just be cute. At least the Mini has a performance edge to so that small = agile and fun. People haven't bought the Fiat because there's no compelling reason to spend good money on it.
In the end, the car shows no virtue in smallness other than to just be cute. At least the Mini has a performance edge to so that small = agile and fun. People haven't bought the Fiat because there's no compelling reason to spend good money on it.