Bummed in Belgrade: Fiat Lays Off Serbian Workers Because 500L Sales Are Terrible
Despite Pope Francis giving the model a thumbs up, sales of the ungainly looking Fiat 500L continue their downward slide, with the automaker announcing it will cut one of three shifts at its Serbian factory.
The cuts made at Fiat Chrysler Automobiles’ assembly plant in Kragujevac, Serbia amount to nearly 30 percent of Fiat Serbia’s workforce, according to Reuters (via Automotive News Europe). When all three lines were running, the plant employed 3,100 people.
Blame the Fiat 500L’s sinking European fortunes and failure to catch on in the U.S.
Zoran Markovic, the workers’ union leader, said that “hundreds will lose their jobs at subcontractors’ plants” once the third shift ends at the plant. At last count, the Serbian unemployment rate stood at 19 percent.
FCA owns two-thirds of the former Yugo plant, which started humming again in 2012 after the automaker forged a partnership with the country’s government. Serbia owns the remaining third. Because of the many cultural and economic differences between that country and the U.S., union negotiations at Fiat Serbia often involve charcoal discounts and chickens.
As for their product, the 500L is a patient that’s fading fast. European sales fell 16 percent in the first quarter of 2016, and U.S. sales aren’t any better. The 500L’s best sales month in the U.S. was December 2014, when it sold 1,482 units. In May of this year, only 334 500Ls found a home.
[Image: Fiat Chrysler Automobiles]
FCA made the assumption that $100 oil would last forever. Wrong again.
Here is the problem with this vehicle. Yes it looks cute, but could or would I buy one? No. 1. The US doesn't want them. Why? Because they are small and very Fiat. 2. Australia doesn't want them. Why? Because they are small and very Fiat. 3. The EU doesn't want them. Why? Because they are Fiat. 4. The Japanese don't want them. Why Because Japan doesn't have a large EU market segment and they are Fiat. 5. Developing nations don't want them. Why? Because they are expensive. Maybe Brazil and/or Turkey might like them. For bball, that's where De Soto's are made now along with Fargo and a couple of other brands. Believe it or not. FCA has a problem with Fiat. The problem is Fiat. Fiat only has potential in countries like Brazil, Turkey and Italy. Not much of a global market. Here's why we don't have a large micro car market, as you can see and as I've stated our market is quite similar to the US. The difference is what is offered in brands. http://www.carsguide.com.au/car-news/australia-taking-on-american-love-of-big-cars-38036
Let's do a review of the FIAT line up, shall we? The 500 is actually a cute little "boutique" city car that is about $3,000 overpriced but has decent build quality and reliability. The 500L is it's homely bigger sister, that didn't do well in the gene pool. While practical, it is saddled with an ungainly appearance and has the worst reliability ratings of any car sold in the US per CR. It is single-handedly dragging down FIAT's reliability and quality scores. It too is about $3,000 overpriced. The 500X is the pretty bigger sister that is just slightly overpriced, but does everything the 500L does and looks a lot better doing it. Then we have the new 124. This is the one that got all the looks in the family. Built by Mazda in Japan, it should have the best quality and reliability of any of the FIAT family. It is actually priced right on target for once. FIAT should immediately dump the 500L from the North American market and push the 500X as it's volume model, with the 500 and 124 playing niche roles.
Fiat is not spending the right money to succeed in the US. Everyone who wanted a Fiat (including my unlikely self) already has one. Where is the 500 facelift that Europe has had for the past 1+ years? The 500L, despite its practical design, has not caught on in the US and nobody can change that. However, its gradual decline in Europe points to a lack of updates to stay relevant. Meanwhile, its competitors have already facelifted, updated or entirely replaced their cars. The 500X is a step in the right direction, but are they going to let this one sit for 4 years like they have done with the 500L? The 124 Spider is and will remain an insignificant model in terms of sales. Fiat can put out a good car, but it fails spectacularly in managing and updating a full product line. It also fails horribly at marketing--sparse and inconsistent. Exactly the opposite of what a "new" brand needs in the US.