Fiat Tries Cheap Gas To Power Sales
Italy has some of Europe’s highest gasoline prices, with the liter going for approximately €1.83. This translates, hold on to your wallet, to $8.54 for the gallon. Italy is also the country of steep sales drops. The Italian new car market contracted by 18 percent last April. Fiat is Italy’s biggest carmaker and sustains even bigger losses.
Where others see a disaster, Fiat sees an opportunity. It wants to ignite flagging sales with cheap gas.
Fiat is expected to unveil a marketing offer that lowers the price of gasoline to one Euro per liter – with purchase of a Fiat, Reuters says. Details of the offer are unclear. Reuters heard that “the offer will be based on a calculation of the motorist’s potential mileage, with effects that can last for up to three years.”
Expect the offer to come with reams of fine print. Most likely, a straight cash discount will be converted into gas coupons, pay now, save later style. The offer is doomed to fail.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
I remember MG Rover offering a similar deal here in the UK, which didn't save their sales. Although, I suppose that was in about 2003 or 2004 and it was much cheaper anyway.
It's amazing that someone at Fiat actually proposed this, let alone that others agreed to give it a try. That's desperation.
This takes me back. When my mother bought her Omni in 1978(?), the dealer gave her a gas card. It was only good at the station next door to the dealer, so she drove miles out of her way to fill up. I think the original plan was free gas for three months, but people abused that. They'd fill up their new Dodge, then siphon it off into other vehicles. So, the dealer put a gallon cap or price cap on the card.
This offer is valid only in a specific brand of gas station, IP (currently 7% of the market), so this could be an improve for business also for the oil company.