By on November 6, 2009

Chrysler is in desperate need of quick fixes. New versions of old nameplates (300, Grand Cherokee) and quick ‘n dirty refreshes, and modifications of existing, moribund nameplates are not going to keep showrooms busy while new, Fiat-based products wend their way to market over the next five years. And so, Fiat is bringing its 500 minicar to the US next year. At least that’s why Chrysler says it’s coming:  to “attract a new customer to our showrooms.” Of course, that’s far from the whole story.
Though the 500 has a certain undeniable charm, it’s looking at some tough sledding in the US market. For one thing, it makes BMW’s MINI look like a Ford Flex. For another, the base engine makes all of 100 horsepower and 92 lb-ft of torque. Neither of these would be unforgivable sins if the indicated MSRP for the Cinquecento weren’t in the $20,000-$25,000 range. Add it all up though, and you’ve got a bella fiasco.

The challenges facing the Cinquecento’s success are even greater when you consider that Chrysler will handpick dealers to build unique showroom “salons” for the 500, in addition to hiring dedicated sales and management staff. Also, all Chrysler dealers will have to carry Chrysler, Dodge, Jeep and Ram brands by 2011, so it’s difficult to understand where the lucky metropolitan-area dealers will find room on the wall to add a Fiat logo. Let alone a possible Alfa badge in the future.

Luckily, the 500 isn’t being brought to the US because anyone inside Fiat or Chrysler thinks it’s going to sell particularly well. The only reason America is getting the 500 is because Fiat gets another five percent of Chrysler’s “equity” when it begins selling a 40 mpg vehicle, per the federal mandate. The other reason: 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. It may nibble around the edges of MINI’s niche, but it’s hard to imagine many potential MINI customers being drawn away by a smaller car with less power, especially if the price difference isn’t significant relative to the mass-market B-segment competitors.

Tellingly, even Chrysler’s optimistic sales projections show Fiat Group products making up a nearly unnoticeable percentage of US-market sales. 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. And they’ll get exactly what they deserve.

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60 Comments on “Fiat 500: The Littlest Bailout Baby...”

  • avatar

    Somewhere, there is a hunk of ore with my name on it. One day, it will be my new Abarth 500.

  • avatar
    Robert Schwartz

    The most expensive Honda Fit w/manual is less than $17,000, and comes with a 117 hp motor. Why would I consider a FIAT over that.

  • avatar

    Have you actually driven a 500? I did (in England) and thought that the interior was a lot roomier and more practical to live with than the Mini Cooper. The back seat is much more functional for human beings and their offspring.

    However, as to the pricing… they need to bring the base model in for far less than the $20k the Mini commands since the tie with BMW speaks alot more about quality than a Fiat/Chrysler partnership to, well, everyone.

    I have two small kids and wanted a Mini to augment the Mazda5 family truckster. But we found that the back seat simply couldn’t accomodate a rear-facing car seat and there wasn’t even enough room under the hatch to fit a tiny umbrella stroller. The Fiat 500 is better in this way and the interior styling is really incredible.

    If they can bring the diesel over I’ll be lining up to buy one… if I can find a Chrysler dealer still open.

  • avatar

    How can a 500 possibly cost $25k? A top-of the line 500 is what, 10k pounds in UK? At 1.65 exchange rate, that’s still only $16.5k. And aren’t UK auto taxes higher anyway? Something doesn’t add up.

    Are they flying each one over on its own private jet?

  • avatar

    You’ve got to be kidding. $20-25k for the U.S. version of a Fiat 500?? If this car is to be built in Mexico why would it be so much more expensive than the upcoming also built in Mexico Fiesta? There is no doubt about zero market for a 500 at the $20-25k price point. How do they intend to sell the car in Brazil if it’s this expensive?

  • avatar

    Hrmmm…isn’t outsourcing supposed to elicit lower costs?

  • avatar

    I would be all over the Abarth version, but the projected price gives me pause. Whoever can come up with an inexpensive small car that isn’t a penalty box in terms of performance or trim is going to win this game I think.

    That being said, us Americans seem to tie price and size together a little more than other countries.

  • avatar

    The 500 will be a flop just like the Astra did for Saturn. It is the wrong car at the wrong time.

    Why can’t Chrysler just repeat the success of the NEON?

  • avatar

    The $20- 25K is fantasy

    The 1.4 sport in the UK retails at £11500. Tax = 15% so the model cost would be £10000 which based on current exchange rate would be ~$16500 – now this is the current price as made by those expensive Italians! Manufactured in Mexico where wages are much lower and I’d bet the 500 would start at $13000 – $14000 which is less than the Honda Fits base price of $15000

  • avatar

    I seriously doubt we will be seeing base model 500’s here (those are for central and SA) we will be getting mini competitors that will start in the $20’s to undercut some. It is intended to be a premium/specialty car, not mass-market.

  • avatar

    I’m not so sure it won’t work. This is a retro design so it pushes diferent buttons than the honda fit etc. It’s more of an emotional pull, not a logical enclosure of space.

    Regarding 100hp. Ina small light car it’s more than adequate. If it really drives like a fiat it will be a blast.

    I remember when the mini was coming out and similar arguments about its demise were proffered. The design is right – let’s see if the combined management skills of Chrysler and Fiat can make it work. Hmmm – that doesn’t sound pretty.

  • avatar


    I have been following the “500 for the states” story but have never seen pricing announced…what do you mean by an “indicated” MSRP? Was this discussed at Wednesday’s PR meeting, or do you be just a guessin’??

  • avatar

    How do they intend to sell the car in Brazil if it’s this expensive?

    Base Fiat 500 in Brasil is 63,860 reais, or about $37,000 USD. For comparison, a new base Honda Fit is 52,405 reais, or about $30,000 USD. At these prices, you still see Fits and 500s on the road in Brasil.

    And keep in mind, Brasil’s purchase power parity is $1,794 (in billions). The US has a purchase power parity of $13,820 (in billions).

    It cracks me up when people are so whiny about car prices. A $20-$25k cost for a nation with the highest wages in the world is attainable.

    A Civic in Brasil is considered a luxury car, about the same as what we would consider a 5 Series to be here in the states.

    And credit is remarkably expensive compared to what access we have, even with our current “credit crunch”.

    Developing nations are growing despite life being so much harder on so many levels.

    So to answer your question, they intend to sell it well, and they will.

  • avatar

    Actually I would never get a Mini and I seriously want a 500. The 500 is more comfortable and seems roomier inside. Plus it’s way better looking to me.

  • avatar

    At least down the road, the Fiat 500 will be the boost we need for the economy by stimulating the independent repair shops once out of factory warranty.

  • avatar

    The 500 should be advertised as an alternative the Smart Car – better handling, more room, better price. However Fiat should NOT introduce the base 1.2 ltr engine – it is utterly gutless and will turn off anyone who test drives it.

  • avatar

    JD powers has had Chrsyler in dead last for initial customer satisfaction. Who do you think is in dead last for the JD powers study in Europe? Fiat! Now we have a match made in heaven.

  • avatar

    In these uncertain times, I’m not going to gamble my $25,000 on a little Fiat in a dealership teetering on the verge of closing. I don’t wear cars like I do my boxers, I need to have them around more than just a few years. What the heck is going to be the resale on the 500 after they flop and no one can service them.

    Chrysler is gone. Anyone considering their products is nuts.

  • avatar

    A little conjecture much here?
    Especially with the price.
    As a person who drives a smart (go ahead, sneer away) this car is certainly on my radar. I don’t see HOW they could possibly jack the price that high. As others have mentioned this thing is going to be produced in mexico, how do we get a car built in a country with a cheaper labor force with less features for the same price as Mini. Somethin isn’t kosher, I haven’t heard anything regarding price and will keep my jaw off the floor until I do.

  • avatar

    Yes, the $20k-$25k range was mentioned on Wednesday, although it was not in any of the presentation slides. I suspect that the cheapest 1.4 NA models might be available at around $19k, with the turbocharged Abarth coming in at $25k and up.

    The point is that this car is not being set up to be a sales smash. Period. Full stop. It serves two purposes: getting Fiat five percent of Chrysler’s equity and creating buzz. It will be available only from a few hand-picked dealers in metropolitan areas, all of which indicates that only loaded trim levels will be available.

    From a business perspective, this strategy makes a lot of sense. There’s a lot of interest in this car, and it will almost certainly bring people into Chrysler dealerships who would otherwise not set foot there. But the 500 has far better mass-market chances in Brazil and Latin America due to demand for small cars and the strength of the Fiat brand there. The US market will only be the high-profit cherry on top.

  • avatar

    I’ve been kinda waiting for the Abarth, to put my almost 10 year old (and gas-hogging for the size) 3 series wagon further down the fleet. I’m not actually surprised by the $25k for the Abarth projection, but I was certainly thinking a plain jane 500 would be well under $20k.

    BTW, the Euro model is made in Poland, not Italy. Which probably has higher labor costs than Mexico, but not (I suspect) nearly as expensive (relatively) as Italy proper.

    My biggest concern is what Chriat is going to do to “Americanize” the car…

  • avatar
    And The Winner Is...

    Chysler/Fiat needs to make a big splash with this little bambino even if it is not going to be a big volumn seller. This intro will be heavily watched as an example for future introductions. If they insanely overprice it ($20-25,000!) it will bomb, and will portend doom for future joint products. My guess is that it will top out at $20,000 for the Abarth. Time will soon tell.

  • avatar

    probert :
    November 6th, 2009 at 1:47 pm
    Regarding 100hp. Ina small light car it’s more than adequate. If it really drives like a fiat it will be a blast.

    Yes Fiats are a blast all right. They’ll be blasting parts all down the road!

    Bocatrip :
    November 6th, 2009 at 2:39 pm

    At least down the road, the Fiat 500 will be the boost we need for the economy by stimulating the independent repair shops once out of factory warranty.

    Oh, I see you’re familar with Fiats also!

  • avatar

    Fiat should be importing the Fiat Panda 100HP instead! I am seriously considering this car!

    It is only $13000 with sportspack, sunroof, navigation and 100 firey bhp’s !!!

    and here is what Topgear think….

    “Sod all that retro 500 nonsense, this is the quintessential Italian runabout. Basic, cheap and unpretentious” !!


    “The 100HP is an awesome little bugger. But bring a cushion”

  • avatar

    What’s the source for $20-25k price for the 500?

  • avatar

    If the intention is to make the 500 a boutique niche market car I think they need to reconsider that position. I believe they have a very viable mass market product with the 500 and need to take advantage of it. If the Abarth version (which I’m not familiar with) is a performance car let that be the boutique niche market version. They need to do more than just get people into the dealerships, they need those people buying cars. A competitively priced 500 I think would be a good way to sell some product.

  • avatar

    the edge is off smart car, everybody that wanted to drive around in the tin box is. There is not a large market for small cars in the U.S. Look at what is rebounding in the marketplace right now, family sedans, not itsy bitsy teeny weeny tin boxes!

  • avatar
    Daniel J. Stern

    Why can’t Chrysler just repeat the success of the NEON?

    The Neon was a fine idea poorly rendered with ridiculously cheap and nasty materials and build quality, poor safety performance, and stupid design/build faults (appetite for head gaskets, water entering the taillamps, the trunk, the passenger compartment, and the Nev-R-Seel frameless side glass, peeling paint, other dumb excuseless flaws) in the first generation, and grossly uncompetitive mechanicals and safety in the second. So all in all, it’s probably best that TCFKAC not repeat the Neon or anything like it.

  • avatar

    I wouldn’t attempt to extrapolate poor sales for the Smart car as an indication of poor overall demand for small cars in the U.S. There are many reasons for that car’s failure:

    Fuel economy that isn’t better than more practical cars
    It’s a two-seater (which limits the market to begin with) with piss-poor performance
    It’s of limited appeal to those who travel a lot on high-speed freeways
    Wonky and unpleasant transmission
    It’s expensive

    I see plenty of small cars selling in the U.S. like the Mini Cooper, the Mazda3, the Honda Fit, the Nissan Versa, the Nissan Cube (not sure how it’s selling, but it is interesting and priced cheaply), various Hyundais, Kias, the Ford Focus… hopefully the upcoming Ford Fiesta, the list goes on.

    If gas prices go up again, and they will as the dollar continues to fall in value, Chrysler will need a fuel-efficient car to compete and they simply have nothing else. Funky interior trim for the Caliber won’t make it an efficient car. The 500 is cool looking, gets great mileage, is supposed to be fun to drive in a way only the Italians can do, and SHOULD be very price competitive.

    Price it too high and it will only be a niche player. Price it too low and people will be knocking on dealer’s doors to buy them and the dealers may even make a profit selling them (with the inevitable markups in the early days).

    I’ve personally been hoping for these to come to the U.S. for years after I drove one in the U.K. At $16k, it would make a really great second car for my small family and a great fun commuter for me. Oh yeah, and if they decide that Americans won’t buy them with manual transmissions, just save me the frustration and lock the doors to Chrysler HQ for good before you go home and collect unemployment insurance.

  • avatar

    I don’t fancy my chances on American roads in a Fiat 500. Having felt suitably nervous in a Dodge Durango driven by a friend merging into Chicagoland highways I don’t see a lot of these selling in the US – this car is like a crisp packet with wheels attached. The generally poor, inattentive and generally reckless US motoring (as well as widespread drink driving) ensures small and efficient cars will never gain much of a market share.

  • avatar

    Why in Earth would anyone remain a Chrysler dealer today? I imagine a lonely Chrysler salesman sitting at his desk surfing the net for most of the day. In this atmosphere walking down the hall to the soda machine would be one of the day’s memorable events.


    Change of subject:
    Neon sales 1999 – 144,000.

  • avatar

    Oh yeah, and while I can respect the Neon SRT-4, the regular Neon was a noisy, uncomfortable, poorly-built, and unreliable rental car at best. The only thing they had going for them at the beginning were the funky headlights, a good advertising campaign, and about 10 hp more than some of their competitors to brag about… though that was quickly strangled by the old-fashioned 3-speed automatic.

  • avatar

    When Chrysler manages to only sell 10,000 500s a year they will be begging for the days when the NEON was for sale. In its day the NEON was a pretty decent car comparable to the second generation Saturns.

  • avatar

    Since to the best of my recollection there have been no recent introductions of new small cars in the U.S. market I don’t think there’s a basis for predicting what the sales would be. The Fiesta will be a very good indication and my guess is Ford will sell every one they are capable of producing.

    I believe there has been a permanent demand shift in the U.S. market towards small cars owing to gasoline cost. I don’t think anyone believes gas won’t be $4/gal again. I used to drive full sized pickups and now drive smaller 4 cyl cars. The marketplace is just beginning to catch up with the actual demand for small low priced high mpg cars with high content. The Fiesta will be the first vehicle with all of those features. Fiesta sales will be a very good barometer of the demand for similar vehicles. The Smart car is not in any way indicative of this shift in demand.

    Between the overall economy and gas cost concerns I think small cars will be very popular most likely permanently.

  • avatar

    Ever tried to drive a Smart car? Me and a friend had the task of shifting one out of a parking space, and it took as about 15 minutes to work out how the godawful sort-of-automatic transmission worked. After that I spent some time laughing at my friend’s face pushed against the window of this pitiful go-kart as he tried unsuccessfully to crash it before parking it.

    This tin wretch is no yardstick of a small car – in a sensible world you might want to look at an Opel Astra, Ford Fiesta, or Toyota Yaris – all good for round town.

  • avatar

    I remember going into a Fiat Showroom in 1971 to look at a Fiat 128 in Army Green for around $2000. That went over well! The “Strada” that came out later was no better.

  • avatar

    I just dont understand the need for some car buyers to plop down extra cash to get 40mpg. You an get a Corolla, Sentra, Elantra for well under $20K and still get 30+ MPG on the highway and have a safer car with decent handling and adequate power. The Fiat 500 wont be anything more than a toy for those who want to be different. Chrysler needs a volume seller and this isnt it. Let the beast die already…

  • avatar

    I just dont understand the need for some car buyers to plop down extra cash to get 40mpg.

    Except the 500 doesn’t get 40 mpg. The 1.4L is rated at 32 city/45 highway (U.S. MPG)… of course, these numbers aren’t to the current EPA test. The 1.3L Multijet Diesel is rated at 44 city/65 hwy… and that one has me salivating.

    In Europe, it’s an inexpensive car. It is also very stylis, and a fairly practical little hatchback that can carry four adults easily… even those with legs can fit in the back seat, unlike the Mini. If you are thinking of the original Cinquecento I think the new one is about three times the size.

  • avatar

    As my country was named so many times in the comments, may I?

    And yes I’ve been in one (not driven). It’s beautiful! The inside is gorgeous and makes ergonomic sense (no carzy/cool/stupid – depending on your POV – pizza, center mounted RPM gauge, not to mention form over function button et al found in the Mini). The front is tastefully retro inspired, but classy and beautiful. The back, not so much as it reminds me of a 1st generation Ford Ka, though only car guys see the resemblence. Did I mention it’s beautiful?

    Size-wise, it’s smaller than a Mini (by close) and Fit (not so close), but much bigger than the Smart.

    In Brazil the market for this little guy is also the fashionista set. At 60 000 reais (about slightly more than 30 000 US dollars), it’s the same price as the smart, but 50% less than the mini (Yep, that goes for about 50 000 dollars down here). And it’s right smack dab in the middle of the Civic’s, Corolla’s, Focus’s, Fiat Linea’s, Renault Mégane’s, GM Vectra’s, VW New Beetle’s and some others prices. SO it’s also aimed at the successful executive, family man, doctor, lawyer (don’t forget these people down here get percentage wise much more than an American’s equivalent of the nation’s GDP), children thereof, who happen to be single or looking for a “fun” car. But it will not reach the same levels of the Civic and all mentioned above, not to mention Fit and other better priced and more practical vehicles.

    Hope to have shed some light.

  • avatar

    Was in Italy this spring and saw a million of them. If I had a commute across town (and not to the next town), I’d look at buying one, but not for 20+…..My two year old M-Coupe was only 28k….of course the 500 has more room :)

  • avatar

    Oh, also saw a ton of MiTo’s…..those are super cool, I think they’d make a serious dent in Mini/GTI/Focus/Civic Si sales…

  • avatar

    One thing to consider re price vs Euro & SA versions is any modifications for federalization amortized over a small expected volume.

  • avatar
    Via Nocturna

    I’m going to take a pass on this (likely) ridiculously overpriced handbag of a car. Call me when you decide to send over the Punto Evo, Fiat.

  • avatar

    The pricing isn’t set yet so I wouldn’t get too carried away with pricing. Here are some pricing examples(converted into dollars):

    Italy: 1.2 pop= $15611.63
    Spain: 1.2 pop= $15250.82
    Germany: 1.2L Pop = $15264.70
    Mexico: 1.4L Sport = $18820.87

    The Pop version isn’t the stripped version (that’s called Naked)so it is decently equipped.

    One thing to keep in mind is that this is not suppose to be a high volume econo box car like a Corolla or Cobalt, it’s a niche car, made for discerning tastes and people who know good design and want something different.

    Considering all the design and safety features included, the 500 is certainly worth more than a Yaris or Elantra, etc.

  • avatar
    Jerry Sutherland

    So this car, like every concept that came out this week in the 5 year plan for Chrysler is dead in the water.
    At least that’s the consensus here.
    Man I don’t know why Marchionne even gets out of bed these days.

  • avatar

    Let’s not get too breathless remembering the Neon. I still think of them as 60,000 mile disposables, because plenty were sold as scrap with startlingly low mileage and scared the owners to Japanese nameplates forever. It was a sales success Chrysler couldn’t afford.

    As for Fiat’s US strategy, co-branded Fiat/Alfa stores would be ideal. I’m not too excited by the 500 (save the Abarth), but an Alfa Romeo Brera could very well tempt me to do very stupid things with money.

  • avatar

    Also, all Chrysler dealers will have to carry Chrysler, Dodge, Jeep and Ram brands by 2011, so it’s difficult to understand where the lucky metropolitan-area dealers will find room on the wall to add a Fiat logo. Let alone a possible Alfa badge in the future.

    This is an interesting development. There are some of us who have wondered if GM should not do the same and sell all brands at all dealerships.

  • avatar

    But, but, but…

    But… my leon has 185,000 miles on it. For $13,000, with two problem parts(powered sunroof and head gasket)that ain’t so bad.

    40mpg, yall. 150hp, 2400lbs of neon= more power and less weight than a comparable year-model Z3.

    You’ve got to remember the neons weren’t all SOHC 132hp automatic cars. It’s a cutie, for sure. Especially those DOHC/Manual/Coupe bodies, but they’re beasts. This is not the sissy car people want them to be.

    Getting classic Mopar hardtop style in a wee tiny, affordable package is great. The rear flanks are gorgeous on the neon coupe. Meaty and delicious! :)

  • avatar

    First off, its gonna cost too much.
    Second, we don’t tolerate small expensive cars here unless they blow your mind. This one wont.
    But now, a word on power. So this things got 100hp. How much does the fusion hybrid have? 140hp? That car is at least twice as large!

  • avatar
    John Horner

    ” … if the indicated MSRP for the Cinquecento weren’t in the $20,000-$25,000 range …. ”

    Where do those numbers come from? In Europe the Fiat 500 is priced starting around 30% less than a Mini.

  • avatar

    The Fiat 500 is an example of a saying that americans in general don´t understand.
    “Bigger is not always better.”

    No, it won´t be the biggest seller in the Usa.
    It´s more of a fashion statement.
    You look much classier in a tailor made suit than a pair of Lewis even if they´re the same price.
    (For cheap tailor made suits, go to Thailand.)

  • avatar

    “So this car, like every concept that came out this week in the 5 year plan for Chrysler is dead in the water.
    At least that’s the consensus here.
    Man I don’t know why Marchionne even gets out of bed these days.”

    Dead in the water???
    This is one of the hottest selling cars all over Europe.
    It wouldn´t be a problem for Fiat if Fiat 500 don´t sell in the usa because it sells like hotcakes everywhere else.

  • avatar

    About the price.
    You can buy a 1,4 500 for about 12500€
    A base Mini Cooper is 17500€
    If they keep the same marginal against the Mini, the price of the 1,4 500 will be ca 14500$

  • avatar
    Gary Numan

    I was in Italy recently and there are lots of these Fiat 500’s on the road there. In the right colors and trim they really do look nice.

    That said, it will be quite suspect to see them premium price this “new” entry using basically deathbed Chrysler dealers and a brand name that is not thought fondly of here.

    Strip the Chrysler name from the buildings and just have Fiat, price the entry model 500’s around 16k and maybe, maybe this will work.

    Then again, thank our tax payers wallets for propping this whole deal together in the first place. Uncle Sugar to the rescue for Fiat and Italy.

  • avatar
    Rod Panhard

    There’s two things wrong with this plan.
    1. Chrysler dealers will have to invest money to create their Fiat boutiques. I don’t think they’ll have that kind of scratch. But on the other hand, there will still be plenty of empty dealerships around at fire sale prices.

    2. The 500 is fitting in a niche that’s between the Smart and the MINI, at least in price. Unfortunately, Smart sales are in the dumper, as are most toys for grown-ups.

    3. If this is a halo-product that is intended to bring people into Chrysler dealerships, I’m not sure I understand the point. Yes, it might get car enthusiasts to wander in, kick tires and such. But there won’t be anything else in the lot to pique their interests. This car might also get some fashionistas into the Fiat lots, just as the MINI has gotten a lot of fashionistas, but there won’t be anything else there for the fashionistas to buy. So its’ really pointless from that perspective.

    Overall, this car really seems like it’s mostly intended to help Fiat gain more control of the zombie known as Chrysler. Other than that, it makes no sense.

  • avatar

    If the whole boutique thing doesn’t work out they could always reskin it and rebadge it as a Dodge Colt.

  • avatar

    It’s cute and stylish…they can sell a few as a niche vehicle. The biggest challenge will be the reliability, and general inability to find mechanics who can work on them. The style might make people pick it over a more practical Fit and even pay a little more, but once you add reliability and serviceability, the Honda lead widens.

    I do think that FUN small cars are a coming trend. But U.S. families with kids (and with more kids than those in Europe) will require much bigger cars than this for the foreseeable future.

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