Fiat returns to U.S. with small car, big hopes

[smart142]

Tim Higgins, Bloomberg News

Bloomberg November 8, 2010

Sam Germana, a lawyer who bought his first Fiat in 1982, still has fond memories of la dolce vita behind the wheel of his Italian import.

So he jumped at the chance to plop down $500 to reserve a special first-edition version of the 500, the tiny car Fiat SpA hopes will make a big splash as the brand returns to the U.S. market this winter. Germana, who lives on New York's Long Island and works in New Jersey, has driven the European version and figures it will be perfect for his daily commute.

"The Fiat is put together like a Toyota, it is really solid," Germana said of his test-drive. "It was a blast to drive."

Fiat, Italy's biggest manufacturer, is betting there are many more customers who fondly recall the sporty Fiat image of bygone days - and are willing to forget reliability problems that plagued the automaker before it pulled out of the U.S. market in 1983. Back then, some owners said its name stood for Fix It Again, Tony.

The Fiat 500 subcompact, known as the Cinquecento in Italy, has sold 500,000 units since 2007 in other parts of the world. Fiat says it hopes for first-year U.S. sales of 50,000 of the fuel-efficient model, which may sell for about $15,000 and for which no mileage rating has been determined yet. The company expects most of those to be in urban areas where traffic and scant parking make small cars attractive.

The Fiat brand's return to North America comes about 18 months after the Italian automaker gained control of Chrysler Group LLC. The Auburn Hills, Mich., company's infrastructure is key to the effort: The 500 will be built at a Chrysler factory near Mexico City, starting in December, and it tapped existing Chrysler dealers to open new Fiat showrooms.

Chrysler has hired a marketing executive from Volkswagen AG, Laura Soave, a first-generation Italian American, to help translate the feeling of the Fiat brand to U.S. car buyers.

Soave, who has a picture of herself visiting Italy as a small child and standing atop a Fiat, has been working on a grassroots marketing campaign to build support among the Italian automaker's longtime fans.

She showed up in July in Asheville, N.C., for an annual gathering of Fiat-Lancia Unlimited, which calls itself the largest Fiat enthusiast group in North America. She's since donated a Fiat 500 to the National Italian American Foundation for a fundraiser.

Chrysler declined to make Soave available for an interview in advance of the Los Angeles Auto Show, where the Fiat 500's U.S. version will be displayed. The show's press days begin Nov. 17, with the public opening two days later.

Two people familiar with her marketing efforts said they will be concentrated mostly on efforts such as showroom selling that focuses on adding options to let buyers personalize their cars. Rather than broad advertising pitches, she's likely to use social media and other grass-roots approaches to target likely buyers and lure them into showrooms for individual treatment, they said.

"My ultimate goal would be not to spend one dollar in traditional advertising," said Phil Bivens, a Tacoma, Wash., dealer who will open a Fiat store.

The small car is being introduced into a market crowded with competitors, including Ford Motor Co.'s new Ford Fiesta and General Motors Co.'s planned Chevrolet Spark.

IHS Automotive, a research firm based in Lexington, Mass., predicts the U.S. market for subcompacts will grow 150 percent to more than 1 million by the end of 2015. Even so, IHS analyst Rebecca Lindland said the growth expectations are based on automakers' beliefs that small cars will become more popular, rather than on current consumer demand.

"Everyone is tooled up for this, and everyone is all excited about consumers buying small cars, except consumers," Lindland said.

European competitors such as Daimler AG's Smart and Bayerische Motoren Werke AG's Mini small cars have seen sales decline this year in the U.S. Smart sales have plunged 61 percent through October from a year earlier, and Mini's are down 1.6 percent, according to the companies.

Fiat decided to eschew selling Fiat vehicles next to Chrysler's Ram pickups and Jeep sport-utility vehicles and now must quickly and smoothly open about 165 showrooms.

"You had to get into a building, a separate establishment" for a Fiat dealership, where somebody could come in and feel like they were at an Apple Store, said Fred Diaz, Chrysler's lead sales executive.

"The Italian style and design and fashion will all play a clear role in who we hire and how we train them and how they communicate," said Bivens, the Tacoma dealer. "It will not be a traditional car dealership experience."

This article appeared on page D - 4 of the San Francisco Chronicle

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Source.

[Graham]

A Euro repair shop in Kingston has an original Fiat 500 for sale. I think he bought a couple of them along with a container of Vespa scooters with hope of making a few $$.

http://www.euro-imports.ca/photos/Fiat500.jpg

If the new ones are anything like the old ones, the smart should compete quite well!

Unless gas prices double, can't see Americans buying too many of these micro cars, regardless of make.

[Huronlad]

If the new ones are anything like the old ones, the smart should compete quite well! Unless gas prices double, can't see Americans buying too many of these micro cars, regardless of make.

The Fiat Panda that makes up the underpinnings for the 500 has a slightly higher TUV failure rate than the Fortwo but still better than the new Mini.None of these new cars(smart, Mini, 500) are actually micro cars. Since Fiat is willing to bring performance models over and hopefully a diesel, I expect their sales will easily eclipse smart in North America.

[MikeT]

50,000 sales is a hyper-ambitious target. If they can do that with one model, I will be shocked. Good on them for giving it a go though. PSA, are you listening?

[Graham]

None of these new cars(smart, Mini, 500) are actually micro cars.

Admittedly, I used that term very loosely, without knowing if there was a definition of what exactly a microcar is!So, I looked it up on Wikepedia and it seems there isn't much conensus. They have various definitions and even a picture of a smart!http://en.wikipedia.org/wiki/MicrocarCheers

[Huronlad]

This article does a better job of defining micro and mini cars.

From my experience if dimensionally the car meet Kei class it is a micro, bigger and it goes into the mini class. The 450 can be made to meet Kei, the 451 does not.

Edited November 8, 2010 by Huronlad

[deezle]

Fiat needs to bring the Abarth version into U.S. showrooms alongside the other models. As Aretha once said: R E S P E C T. They can price it high, but the public just needs to know that there are some performance genes in the family --- then they'll buy a cheaper version.smart should have brought the full Brabus. It's too late now.

[Paul Jungnitsch]

Fiat 500 pricing for Canada up, starting prices $16000 to $19500:

https://www.fiatcanada.com/en/

Fiat USA build and price:

http://www.fiatusa.com/en/build_your_own.html

[MikeT]

Contrast the difference in FIAT pricing in CDN and USA (difference: $500 on $16K price) with that of smart ($3000 on $15 K).FIAT will hurt smart badly in Canada unless some pricing adjustments are made. Not so much in the USA. Bravo to FIAT for coming back!

[smartnhappy]

Chrysler just announced that 58 on it's Canadian dealers will be selling the new Fiats.List to follow.

[Britsmart]

I was excited when I went on the Canadian Fiat site to see the prices up, looking forward to checking them out once they hit the dealerships. I love smart but this is probably making them a bit nervous and saying "Uh Oh". Soon they will have the Scion iQ to deal with as well, mind you I think it's a bad concept to squish the back seats so your rear passenger have window to the back of their head. I say smart needs to get back to the drawing board and hussle to get something out there and with Penske doing that crazy idea to bring a "fake" five door smart to the USA to help improve sales.......I think because they are trying to push it out fast there will be quality issues and therefore hurt smart sales further.Brit and Marty Car (Sorry about going off topic a bit )

[Francesco]

Gack. They've changed the front and rear fascias to comply with the idiotic DOT bumper standards.

[yellow bumble bee]

MikeI still think that MB set their prices for the new smart taking into account the $2000.00 rebate we were receiving from the government and they have not changed the price when the rebate was dropped. Thats my story and I am sticking to it.Roy

[GetSet]

FIAT will hurt smart badly in Canada unless some new diesel models are made.

THIS!

[MikeT]

Hey, I was mis-quoted!

[smartzuuk]

That is fantastic pricing...

[Francesco]

No kidding! Did you see the features list at those prices? Wow. Never mind smart, MINI should look out. These prices are quite a bit lower than for the equivalent models in Europe.

[MikeT]

Hecho in México helps that!

[Francesco]

I dunno, is Poland a high-cost country? If so, why did they build it there?

[MikeT]

Maquilladora salaries are lower than EC salaries, even in the former east bloc!

[Francesco]

I had heard that Puebla (VW) and Toluca (Chrysler) have the highest standard of living in Mexico.

[deezle]

Here's the list of initial 58 dealers in Canada: link

I find the Fiat Canada website kinda lame. Not only is it not possible to configure a car with your color choice and options, but you can't even rotate the cars to see them from various angles. Maybe the site will evolve (and revolve) later.

The prices do look attractive. Maybe it'll stop Mini from selling at jacked up prices in Canada compared to the U.S. That has always pissed me off and soured my entire opinion of the mini.

[MikeT]

It's a fine dealer network, well distributed across the country, and the car looks to be great, with a competitive price and more polyvalence than a smart.It will be interesting to see what the Transport Canada ratings for this car will be, and whether they will - like the smart 451 - require expensive premium gasoline.MINI is way overpriced and should suffer with the advent of this new challenger, probably moreso than smart.

[MikeT]

1.4-liter I-4 FIRE with Multiair100 horsepower (75 kW) at 6,750 rpm95 lb.-ft. (129 N•m) of torque at 4,250 rpmThis is the ECE fuel consumption for the 500 with the 100 PS engine:City: 8.2 L/100kmHighway: 5.2 L/100kmOverall: 6.3 L/100kmUS EPA ratings are 29 MPG city and 37 highway, which compares to smart's 33 city and 41 highway. The Fiat will do 0-100 in about 10 seconds though and tops out over 180 km/h, so the FE is good.Then there is the "other one":1.4-liter I-4 FIRE Turbo with Multiair170 horsepower (128 kW) at 6,750 rpm170 lb.-ft. (231 N•m) of torque at 3,000 rpm This is the most likely power output for the Abarth when it comes over.

[Francesco]

Michael Schumacher uses an Esse Esse as his daily driver (or at least he did before joining Mercedes GP, according to his interview on Top Gear).