Fiat trims prices, adds features to counteract bias against small cars
After a rough 2016 for small cars in the U.S., Italy’s puckish Fiat brand is resetting itself for the 2017 model year with lower prices, more content and simpler packages of features within each offering.
Fiat is cutting prices in the U.S. by five to 10 per cent on many vehicles, based on examples provided by the unit of Fiat Chrysler Automobiles NV. The mid-range version of the 500L, dubbed Trekking, will cost only about one per cent less but will come packed with previously expensive extras — heated leather seats, a premium BeatsAudio sound system and a 6.5-inch touchscreen with navigation.
A key step has been simplifying the offerings: Each 2017 model will have three packages, or trim levels, instead of as many as 10 on the outgoing 500, said Bob Broderdorf, the brand’s North America director.
“Think about that experience online,” he said. “Think about it in a showroom. Think about what customers go through. And if you’re new to this, you get frustrated” and might stray to another brand.
Fiat has had to adapt to a demographic shift among its customers as well as the market’s seemingly permanent preference for light trucks. When the brand returned to the U.S. five years ago, it appealed primarily to well-travelled baby boomers, and its lone, little model had to span as many needs as possible. Now the line includes a wagon, a roadster and a subcompact crossover. And as some of the newness and nostalgia has worn off, Fiat is selling to younger consumers who are looking for something fun to drive that won’t wipe out their budget.
Millennials and Generation X account for 45 per cent of the brand’s customers, the company said, and the average buyer’s age is 49 — half a decade younger than for the industry as a whole.
In the U.S. auto market, sales of light trucks — pickups, vans and sport utility vehicles — have outnumbered cars by 3-to-2 in recent months. That presents a challenge for brands like Fiat specializing in smaller models. Fiat’s volume sagged 17 per cent to 22,078 vehicles this year through August, more than double the 8.4 per cent decline in car sales in the truck-loving, near-record U.S. vehicle market.
“They don’t have the right lineup for the current American consumer,” Jessica Caldwell, an analyst with car-shopping website Edmunds.com, said in an email interview. “For the past three years, light trucks have outsold cars and we’ve seen small-car market share on a downward spiral.”
The shift away from traditional cars is more than just a fashion trend amid relatively cheap gasoline prices, Fiat Chrysler chief executive Sergio Marchionne said in January. He said the automaker would stop producing the Dodge Dart compact car and the Chrysler 200 mid-size sedan to free up factory space for more Jeep SUVs and Ram trucks.
Each Fiat model has an entry level called Pop. The 500 Pop for 2017 starts at US$14,995, more than US$1,000 less than its original price in 2011. The Lounge edition’s price was cut by US$2,000 to US$18,395 and the racy Abarth version will be US$2,580 less, starting at US$19,995. A cabrio top is available as a US$1,495 option for the 500.
Josh Towbin, 41, a Fiat dealer in Las Vegas, had no complaints with the previous lineup, but he said he’s excited about the 2017 model year.
Streamlining each model’s offering should make it “easier for stocking and promoting and making sure that we have the right stuff. It makes it easier for the guest,” Towbin said.