Fiat 500: Yup, It's Flopping
I was not the only person to predict that the Fit 500 would enjoy strong initial sales and then flop as the novelty wore off… and I was half right! Sales climbed early, peaking at around 3k units per month this summer before dropping precipitously in September and October. In August were still wondering if the 500 could become a classic, but as of November 1, Fiat 500 inventory stood at a staggering 184 days. Now, Automotive News [sub] quotes UAW officials as saying that
Chrysler Group has suspended production this month of the 1.4-liter FIRE engine that powers the Fiat 500 in North America because of slow U.S. sales of the subcompact
One in four workers at the Dundee plant where that engine is made has been laid off according to the report, which is a pity considering Fiat got five percent of Chrysler in return for those US jobs. And keep in mind, this is happening at a time when anecdotal reports of Fiat 500s in rental fleets are beginning to become more common… the 500’s retail sales number is likely quite a bit lower than the gross volume numbers cited here. Nor do we know what kind of incentives are being used to push the 500 out the door. But despite all this, and the fact that the 500 will not sell the hoped-for 50,000 units in North America, Chrysler is keeping a brave (or is that delusional?) face on the situation, telling AN that it is
very pleased with the progress we are making with the North American launch of the Fiat brand.
Really? Really? Wait, hold up a moment, I predicted that too! Way back in November of 2009, I wrote
Fiat wants to use the 500 to consolidate its strong presence in Latin America, where small, 100 hp vehicles are more accepted. The majority of 500 production at Toluca, Mexico will go to Brazil and other Latin American countries, as a halo for the Fiat brand’s success there.
Meanwhile, in the US market, the 500 will be little more than an overpriced fashion accessory… Nobody, from Sergio Marchionne on down, cares if this car succeeds in the US except for the fashionista fanatics who will pay nearly any price for one.
It just turns out that there are fewer of those people left than anyone thought…
More by Edward Niedermeyer
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Here in Toledo we have a ton of Chrysler employees because of the Jeep and Chrysler plants here. We had one of the first Fiat dealers in the country, because they must've thought employees would flock to it. They didn't. In fact, the dealer was slapping a $2000 ADM on each car at first. That helped keep them off the roads. Now the dealer is advertising them as a special employee lease at $99/month with $2995 down. In the Chrysler world there are often extra incentives for employees and family that are not available to the general public. That extra incentive plus $2995 must get the lease down to $99/month. We'll see if anymore hit the roads of NE Ohio....
This chart leaves a lot of room for interpretation. One could also argue from this data that for the past few months, Mini and Fiat have essentially split the market for small European coupes, though Fiat did it with a fraction of the dealers, no incentive cash/financing, and only one available base engine while Mini had turbos to sell. From this perspective, they are holding their own while the market waits for more dealers and the Abarth. Personally, I really wanted to love the 500. I was in the UK shortly after it was introduced there and accompanied a friend to a dealer when he was shopping for one. This guy is a big car nut, driving a collection of classic MGs and a Bentley, and he bought one with a 1.2 L multiair engine as his daily driver and he loves it. When the dealership finally opened here near me in Northern California I went to drive one. The salesman was enthusiastic about the car and seemed very knowledgeable. I was looking for a manual transmission and he lamented at the time that nearly all of his sales were manuals but his inventory was heavy on automatics (seems someone at Fiat listened to people at Chrysler who said that there is no market in the U.S. for stick shift cars). I drove a Sport model (the only one he had available with the manual) and thought it was OK but underwhelming. Other than the styling there just didn't seem to be much to the driving experience different from any small Japanese car. The engine, for all the hype, just didn't offer breathtaking fuel economy and just sounded like any droning 4-cylinder... I was hoping for a bit more character to make up for the performance... sort of like an older Miata that sounded tuned and fun despite a relative lack of oomph... but this just didn't feel or sound special in any way. From a pricing perspective, I actually think the base Pop model was a very fairly priced car. It included nearly all of the options one would really want, including power everything, USB for my iPhone, and the same engine as the other cars. Another $500 would add alloys for a total of $16k. This is but a small price premium over a Mazda2 or even a Hyundai. However, most of the cars on his lot were loaded Sports and Lounge models with sticker prices near or over $20k, and at this price point it just didn't seem like enough difference over the base Pop. Oh, and the sunroof was terribly designed. Where I live, Sacramento, it gets into the triple digits in the summer with no cloud cover and the sunroof had no fully opaque shade, the screen it comes with just let way too much heat into the car. Mini had the same design flaw, actually, what, it doesn't get sunny in Europe? England I can understand the oversight, but not Italy. If one lives in California or the Southwestern U.S. the sunroof is a no-go option.