Fiat’s
North American relaunch hasn’t been one of the successes
of the year by a long shot, but ignominiously it has
been listed as one of the flops of the year by Yahoo
Finance, in its year-end round-up. Although holiday
season lists are usually designed to be controversial,
the inclusion of the Fiat 500 has been quickly leapt on
by the media.
Choosing its flops of the year, Yahoo Finance
picked out two cars launched in the United States this
year – the Fiat 500 and Chevrolet’s electric-powered
Volt. They ranked alongside items such as RIM’s
ill-fated ‘Playbook’ tablet computer, Hollywood animated
flop ‘Mars needs Mums’, and Netflix’s ‘Qwikster’, killed
off before it even launched.
“This year, Fiat released its new 500 – a three-door car
that is under 12 ft long,” wrote Yahoo Finance in
its summary. “The car was expected to be a big seller,
rivalling BMW’s Mini. Even before the car’s launch,
however, detractors were predicting failure. Alan
Mulally, CEO of Ford, stated in Panorama magazine, ‘I do
not see a large market in the U.S.A. for a smaller car
than the Fiesta. Those that tried failed.’ He was right.
According to online magazine DailyTech, ‘Fiat expected
to sell 50,000 500s during 2011 in North America.
Through the first seven months of 2011, Fiat sold fewer
than 12,000.’ Sales were so poor that Chrysler Group,
which manages the Fiat brand in the United States,
ousted U.S. chief Laura Soave this past November.”
The long-awaited Fiat relaunch in the United States
stumbled from the very first step, due to senior
Chrysler Group management’s lack of understanding of
just what was required to launch an automotive brand,
and a similar lack of appreciation of the budgetary
requirements involved. It also made the mistake of
limiting dealer spread to around 130 dedicated
standalone showrooms, while the car’s pricing was
likewise at the top end of expectations. On top of all
this, the car’s marketing campaign was disastrous,
failing to exploit the attributes of the 500. This
culminated in the decision to use actress and singer
Jennifer Lopez as the face of the Fiat 500, resulting in
much brand damage that has yet to be fixed.
Sales figures have graphically told the unfolding story.
After peaking at just over three thousand units in July
and August, sales of the 500 slipped down to 2,733 units
in September and 1,965 units in October. Last month, as
Fiat reeled from the Lopez association, they slipped
even further, to just 1,618 units, while sources
revealed that Fiat had half a year’s supply of 500s
stacked up on dealer lots. That puts the 500 on 17,444
total sales for the year to the end of November, likely
to be close to 20,000 units at the end of this year.
It is all far adrift of
the original sales target of 50,000 units a year, and
with new brands generally reckoned to have around a year
to carve a foothold, Fiat North America has a lot of
urgent work to undertake if it is to reverse the picture
and get the 500 relaunch on track.
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