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…
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