By on August 17, 2009

I have no idea how Chrysler is going to survive. In fact, I assume the feds saved ChryCo from the grim reaper knowing full well the dying domestic didn’t have a hope in hell of recovering, just to help out their pals at Cerberus, I mean, save the US economy from total collapse. Or something. Anyway, Fiat ended-up paying bupkis for some pretty juicy assets. Jeep much? Chrysler also has some modern production facilities, including a plant in Toluca, Mexico. Today’s story in the Wall Street Journal, “revealing” Fiatsler’s plans to build the Fiat 500 down South is something of a non-story. Our pals over at Inside Line called that one way back in January. But it’s worth repeating: An American Fiat 500 is a non-starter. We reckon a hecho en Mexico 500 will be built by Mexicans for Mexicans. Or, as Edmunds puts it . . .

Fiat already has a major presence in Brazil, but it’s not much of a player in Mexico. And undoubtedly it would like to be. We’d bet that buyers in Mexico are apt to be much more receptive to subcompact Fiat 500s, Pandas and Grande Puntos than, say, U.S. consumers. In addition, meeting crash and emission standards is also likely to be a much simpler proposition in Mexico than the U.S.

Today’s “leak” comes complete with a bone for U.S. UAW workers/taxpayers who might greet the news that Chrysler is using billion of American bailout bucks to help Fiat gain a toehold in Mexico:

Chrysler is also looking at making a small Fiat engine for the 500 at a Chrysler plant in Trenton, Mich., and is considering building a Fiat-derived compact car slightly larger than the 500 in the U.S., a person familiar with the plans said.

In other word, the 500 per se will never make it north of the border. And that “consideration” of a U.S. engine plant will eventually give way to no way jose. Which is just as well, as only a few American diehards would have bought it. Building and selling a small car in the US market made a good story, though.

Get the latest TTAC e-Newsletter!

37 Comments on “Chrysler to Build 500 in Mexico, for Mexicans?...”


  • avatar
    Bunter1

    I’m thrilled to see my tax dollars are saving jobs in the USA.

    Thanks President Goodwrench!

    Bunter

  • avatar
    superbadd75

    I kind of suspended reality for a little while and let myself believe that the 500 might actually make it to the U.S., but truth be told I knew down inside that it’d never happen. Fiat talked a big game to get Chrysler, and we’re all going to watch as none of it comes to fruition and Fiat uses Chrysler’s plants for their own greedy purposes. Fiat and Alfa are going to have new products for sale in America before Chrysler has a new lineup of competitive small and midsize cars.

  • avatar
    kowsnofskia

    Wow.

  • avatar
    commando1

    Gee. Like I never thought this from day one….

  • avatar
    ajla-

    I have no idea how Chrysler is going to survive.

    Chrysler is going to “survive” the same way that an organ donor “survives” after he/she dies.

  • avatar
    gslippy

    Count me disappointed. I thought Chrysler might have something interesting to buy soon.

    Whatever happened to “building cars Americans want to buy”? Maybe the emphasis should be on want… but can’t. See ya, Chrysler.

    Oh, wait, there’s always the Chevy Volt to look forward to, as well as the 30 other new models from GM. Maybe those are the cars Americans want to buy, and can! Or not.

  • avatar
    Juniper

    Allpar claims the engine may be built in Michigan and that the 500 is slated to be sold in the US. We shall see.

  • avatar
    derm81

    Well, if you want to be a die-hard capitalist, then it isn’t a bad move. Labor is something near $3.25 an hour in Mexico versus 10X that amount in the States. Eventually it is going to become too expensive to assemble vehicles in the USA. Hell, even the transplants are starting to see that it is getting a bit pricier even in the South with temp help.

  • avatar
    Daniel J. Stern

    meeting crash and emission standards is also likely to be a much simpler proposition in Mexico than the U.S.

    …because Mexico permits vehicles meeting the European ECE safety and emissions regulations, as does virtually the entire rest of the world except the U.S. and Canada.

  • avatar
    Rod Panhard

    Maybe somebody woke up from their siesta and looked at how most Americans won’t fit in a Punto or 500. Maybe somebody woke up from their wet dream and realized that the costs of making the tiny Fiats jump through the hoops for NHTSA, DOT, and the insurance tests would make the cars ugly, heavy and non-competitive.

  • avatar
    Spike_in_Irvine

    Funny, the 500 is not the same size as the original Bambino, it’s about the size of a BMW Mini. Is that selling in the USA?

  • avatar
    akear

    This car was never going to be a success in the US anyway. Let the Mexicans have this pathetic urinal cake of a car.

  • avatar
    zaitcev

    Forget 500, where is Panda? I don’t care for 500, but I know people who are very happy with their Pandas.

  • avatar
    ritchie628

    I fail to see anything other than speculation either in RF’s editorial, or the straightline blog. The WSJ article reports as fact that the 500 will be made in Toluca,but also states that fiat is considering “other” vehicles to introduce to the US market.

    I’m not gonna jump on this as news so quickly. My money’s on the 500 being imported to the US. In the meantime, still stewing over Fiatsler firing their archivist and setting their entire archives on the curb with a FREE sign on it.

    Oh. Wait.

  • avatar
    akear

    Like the Astra they may find 10,000 buyers for the 500 in the US. It will be a rare sight indeed.

  • avatar
    djn

    @ritchie628

    Touche!

  • avatar
    ohsnapback

    First, a car this small would be destroyed on the moon crater-esque roads in salt belts.

    Second, and regardless of the other issues, this is another shining example of why and how the U.S. is in for Great Depression II – a nonstop, absolutely unrelenting loss of good wage, solid middle class, manufacturing jobs, no matter what the ‘globalists’ claim.

    A wage race to the bottom….with Americans chasing Chinese and Mexican wages, not the other way around.

    The true unemployment rate in the U.S. right now, if you count those who ran out of unemployment insurance, those who are “discouraged” after sending out 1,000 resumes and doing 200 interviews with no job offers, and others that the government conveniently doesn’t count as unemployed, is 19% (30 million Americans).

    Ross Perot warned everyone back in 1988.

  • avatar
    Jimal

    Did I miss something? Has someone other than RF, say, someone at Fiat or Chrysler, stated that they are not bring the 500 to the U.S.? Is this fact, conjecture, or a Wild Ass Rumor?

  • avatar

    The 500 is stupid and totally unrealistic as a car that’s gonna help Chrysler/Fiat. ITS NOT.

    Chrysler is fucked. I just wish they could bring jobs to Detroit and Flint to repair the damage GM did there.

  • avatar
    John Horner

    Hold on a second, what is actually being reported is that the usual unnamed sources say Fiat 500 production will be in Mexico, and that they still intend to sell the 500 in the US. The “news” is that the Michigan factory which hoped to get in on this model isn’t going to do so.

    http://finance.yahoo.com/news/AP-Source-Chrysler-to-build-apf-1080542339.html?x=0&.v=13

    The Fit, Mini and Smart all passed US certification requirements, so I don’t see why the 500 couldn’t also be engineered to pass those requirements. Fiat has been talking about a return to the US for a very long time. Perhaps that was taken into account when the 500 was designed.

  • avatar
    derm81

    Chrysler is fucked. I just wish they could bring jobs to Detroit and Flint to repair the damage GM did there.

    A lot of people are actually still holding hope that the good ol days will return. Not saying that you are but these folks aren’t doing much to retool their skills and learn new trades.

  • avatar
    PeteMoran

    It’s a good old-fashioned Caper Comedy (in COLOUR)!

  • avatar
    ECJ

    It makes sense to assemble a product like this in Mexico. The final cost of an economy car is proportionally more sensitive to labor costs than a vehicle with more expensive parts content. In other words, a 200% increase in labor cost might change the cost of a Porsche by 15%, but it could change the cost of a Fiat 500 by 30% (actual numbers may vary).

  • avatar
    windswords

    “An American Fiat 500 is a non-starter.”

    Says who? Chrysler? Fiat? The WSJ? You have a source? The fact that it was going to be assembled in Toluca was a well known secret. It’s a good flex plant with two products, one of which (PT Cruiser) will soon be suspended. We know the engines will be made in Trenton, MI. No word on where the tranny will be made. I would like it to be Canada. Then you can rant about Canadian cars for Canadians. Oh well, the only Chrysler tranny plant is in Indiana. So if the engine and tranny are made in the USA then it’s more American than Mexican. If they only sell it in Mexico then you can say it’s an export product from America to Mexico. Love to see how you would report that.

  • avatar
    Conslaw

    Well, at least the Mexican workers will have jobs in Mexico, jobs that in some small help pay for the early retirement of American autoworkers.

  • avatar
    oldyak

    I don’t care if its built in Haiti!
    This car will sell like gangbusters in the U.S.A.
    Too many generations have passed that dealt with the ‘old’ Fiat!
    Lets give the new one a chance!
    Hell,they are so simple that everyone will love them!
    If Fiat/Chrysler has to do this to be competitive,then so be it.
    At least Americans can get a taste of European without spending $30,000!

  • avatar
    WetWilly

    Funny, the 500 is not the same size as the original Bambino, it’s about the size of a BMW Mini. Is that selling in the USA?

    It’s smaller than a Mini, and that’s the point. Americans don’t buy cars that are much smaller than a Yaris 3-door hatchback. Which is basically the reason why we don’t/won’t get the Ford Ka, Hyundai i10, Mazda 1, or Nissan Micra, and the Toyota iQ is heading to The Land of Low Expectations, i.e. Scion.

    If the 500 makes it here, I’ll expect to see them plastered like love bugs on the grilles of Sedan de Villes driven by Miami Beach octogenarians.

  • avatar
    windswords

    “It’s smaller than a Mini, and that’s the point. Americans don’t buy cars that are much smaller than a Yaris 3-door hatchback.”

    Then why do I see so many damn Smarts on the road? They’re ugly too, but people still buy them. At least the Italians don’t do ugly.

  • avatar
    rnc

    “Chrysler is fucked. I just wish they could bring jobs to Detroit and Flint to repair the damage GM did there.”

    That is the destruction that the UAW caused, yeah they took care of thier current members, but in the process they guarenteed that thier children and grand children wouldn’t have access to the same jobs. I imagine there’s alot of former UAW workers who probably realize (alittle late) that 80% of what they had is alot better than the 100% of nothing that they have now and no real job skills to go forward.

    At some point you have to accept that the world has changed, there would still be manufacturing in the US if people would accept that it isn’t going to pay enough to support a six member family anymore and you are responsible for your retirement and well being, I mean the rest of the country adjusted to two income families/401k retirements reasonably well and these are the industries that haven’t left.

    And yes the Big 3 management had thier part in this, but when they were trying to compete with thier operating hands tied to thier ankles, I imagine that at times they made the only decisions that they really could.

  • avatar
    Robstar

    Windswords> Hear, hear! I see a bunch of smarts on the road as well.

    I know 2 people that own them (both love them, btw).

    I think that is one of the few (only?) cars with less wheel hp than my motorcycle.

  • avatar
    jerry weber

    There are many issues revolving here. First the mini is a quasi sports car (drive one if you haven’t already), the smart is DOA,and the Fiat 500 would join the back of the line. With no established residual values, and no heritage, what makes anyone think that the Japanese and Koreans aren’t going to be the first second and third choices for small car buyers? Japanese small cars have very good resale values and mini’s are through the roof. This little fact is the biggest unmentioned fact as to why American cars makers finally crashed and burned. For a variety of reasons including over production causing fire sales and cheap leasing; the US cars generally had and have poor resale values. This makes more discounting necessary to sell new ones etc. Back to Fiat, when they last were in the US, they battled VW. This was a fight they lost on reliability and resale issues (fiat had none). If this is what is going to save fiat/chrysler in the 2000’s the govt. should have just let them (chrysler)sink.

  • avatar
    windswords

    Robstar:

    “I think that is one of the few (only?) cars with less wheel hp than my motorcycle.”

    LOL. I bet your bike has more HP than a 1972 Pinto I drove in the early 80’s. German 1.6 engine, 54 HP.

  • avatar

    smart is a niche player, if North Americans were buying them here in sufficient numbers they wouldn’t be imported from high cost to build Europe. smart seems to be limited to how many snarky license plates their owners can dream up for their rides. In some ways the smart is the uber Prius. The Fiat 500 has a long hill to climb toward being a fashion accessory of the rich and snarky.

  • avatar
    WetWilly

    Don Qua,

    +1. Smart sold 24,622 ForTwos in 2008. Not exactly flying off the shelves. BTW, where I live, I see more Maserati Quattroportes than Smarts; anecdotally I should assume the Quattroporte is outselling the Smart, but I don’t.

  • avatar
    70 Chevelle SS454

    Wait, but our President is smart, now. Not like that dumb guy that was in there, before. There’s no way a foreign company could have played him into handing over control of one of the largest corporations in America and thousands of Americans jobs in exchange for a few empty promises about enviro-friendly small cars!

    Right?

  • avatar
    John Horner

    “Americans don’t buy cars that are much smaller than a Yaris 3-door hatchback.”

    An interesting point there. Up until several years ago you couldn’t buy the Versa, Yaris or Fit in the US because the accepted wisdom was that “Americans don’t buy cars that small.”

    Then Nissan, Toyota and Honda all scrambled to finally bring that class of vehicle to the US and now it is an established segment. The class leading Fit has been in chronic short supply for a few years now.

  • avatar
    Jimal

    I just realized we all missed a little bit of “TTAC speak” here. According to another thread here, the “?” at the end of the headline is supposed to tell you that any declarative statements contained within are opinion or conjecture.

    I’m still holding out hope that the 500 will come here. It wasn’t all that long ago that Ford said it wouldn’t bring the Fiesta to the U.S.. Too small they said. Until they decided to bring the Fiesta here.

    I’ll take an Abarth please.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • DenverMike: High fuel prices will have an effect on all segments, but fullsize pickups are safe, if not protected....
  • Garrett: Having driven a TLX Type S, I can tell you that it’s a real hoot to drive. So much so that it was enough to...
  • Lemmiwinks: Strange business, that.
  • CKNSLS Sierra SLT: jimmyy The state in which I live (Utah) a small sedan would be beyond a joke for the families here.
  • bumpy ii: “Stutz also made a six-door armored funeral sedan out of the Bear” Seems to me the armor would...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Jo Borras
  • Mark Baruth
  • Ronnie Schreiber