Dealers Dish On The Fiat Future
I think there’s a decent business case if you take the long viewChrysler Dealer Don Lee gives Automotive News [sub] his take on Chrysler’s pitch to new Fiat/Alfa dealers, thereby confirming that few dealers expect a Fiat franchise to take off in the short term. And for those “decent” long-term prospects, Chrysler’s saying thata showroom of 2,500 to 3,000 square feet would be sufficient to start… To get there, some dealers are going to have to take it slower. They’ll have to offer a separate showroom but go beyond that as more product becomes available.So, what will the 500 do for dealers? According to the Pentastar gang, dealers can expecthealthy gross profits of up to $1,500 on each Fiat 500Lee reckons that figure is “optimistic,” but we disagree. Chrysler has said that 500s will start around $20k, and they’ll have to considering any US-bound 500 that comes out of Chrysler’s Toluca, Mexico plant could be sold for near double that price in Brazil. Per-car profit margins on US-market 500s will be strong… it’s the 50k projected annual sales volume (78k by 2013) that prospective dealers need to worry about.
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All of these argument are treating this $20K starting price as gospel... and clearly that doesn't make any sense. Mirko shows that the 500 is cheaper in Europe than a sizeable number of cars... why would it not be here? This car is going to be produced in Mexico, it won't have to deal with any currency fluctuations or distance related costs. I'm also inclined to think that many here really don't understand that this car will be huge on image alone. It will be the next Mini, based upon appearences in the least, and its cheaper price tag (guranteed) will allow it to have an advantage. Cute as a button, and cheap? Sign me up. Honestly all these arguments are a little too practical as well... Since when did people only buy a car based in pure economics? I doubt that everybody in the world is an accountant. There is still plenty of emotion involved when buying a car, and this one surely plays off on that. Honestly though, with all these arguments, it seems that the best and brightest are a bunch of curmodgeonly penny pinchers that only care about the economic bottom line... live a little, drive something a bit more exciting than an appliance! Or is this site turning into "The Truth About Tightwads"? Oh and Dynamic... you either aren't Italian, don't know any, or don't live in the NYC metro area. There will be 27 of these.... on one block in the Bronx.
I don't think the 500 will be a dud. I'll even rescind my earlier comments about Chrysler dealers. The Americans for whom the "newness" factor is important didn't mind going into Chrysler or Jeep dealers for the first Grand Cherokee, PT Cruiser or 300. Which just proves Roundel's right - it is an emotional purchase. I just think the numbers they're putting out there -- 50K sales/$20K per unit/$1.5K profit -- are completely out of whack with market realities. Also, Roundel may be right about the passion of Italian-Americans. The owner of the ristoranteTrattoria Zero Otto Nove in the Bronx's Belmont section (NYC's other "Little Italy") has a 1950s Topolino parked in the outdoor cafe area. You can probably count on him to be an early adapter and key influencer for early 500 sales. But I still think with all the interesting small car options Americans are getting from established brand names, Fiat will be lucky to move 20K units in 2012.
How many new cars are purchased every year as graduation presents as a send off to college, how many of those kids (who really care nothing for cars in the same way that the majority of those on here do) will be drawn to the 500? 50k units in a year really isn't that much and I think that the $20k price will come down after the early adopters take thiers and the base will be about $15k were differentiation will be enough to move it in a way that the little honda/toyotas can't (I mean who would feel cool in a fit?). How many people here actually want the car to fail (b/c of Chryco)vs. actually thinking it will fail due to markets?
Whether it succeeds or not, I expect the 500 will put an end to Mini's spectacular resale value. Why buy a 2-year old Mini when you can pick up a brand new 500 for the same amount?