Fiat’s return is gaining traction
A year after the Italian firm resumes selling in U.S. after a three-decade absence, its sales are picking up.
A year after the Italian firm resumes sales in the U.S. after a three-decade lull, its sales pick up.
Fiat returned to the American auto market a year ago with great expectations but is only now starting to shift into gear.
The Italian car brand, which fled the U.S. almost three decades ago after developing a reputation for subpar quality, is seeing sales accelerate after getting off to what its U.S. sales chief, Tim Kuniskis, conceded was a slower-than-expected start.
Fiat is filling gaps in urban regions where sales of its fashionable Fiat 500 sedan would expect a good reception. Fiat’s first San Francisco dealer is expected to open this year. It has built its dealership network to 142 franchises and expects to have 200 by year-end.
“They certainly have picked up some momentum,” said Alec Gutierrez, senior market analyst of automotive insights for Kelley Blue Book. “It is a sporty drive and has a nice upmarket European interior. It fills a nice niche.”
Next year Fiat, a Chrysler Group sibling, will bring out a larger car to complement its only current U.S. offering, the tiny 500, and at some point the stores will add Alfa Romeos to the lineup.
“We are picking up steam, no question about it,” said Marc Cannon, spokesman for Autonation Inc., which operates 260 car franchises and is the country’s largest dealer chain. Autonation has opened five Fiat franchises in the last year and has two more planned.
He said Fiat has worked “kinks” out of its sales and distribution system, has plenty of its 500 in the pipeline and is getting a push from rising gas prices.
Fiat 500 sales were just short of 20,000 last year, less than half what the automaker expected.
The bestselling small subcompact last year was the Nissan Versa, with sales of nearly 100,000. The Ford Fiesta at 69,000 and the Honda Fit and Mini Cooper, both at just slightly less than 60,000, also were popular small subcompacts.
But Fiat sales are growing as it expands distribution and signs up new dealers. It sold more than 5,000 units of the 500 in the first two months of this year and expects to sell at least 3,000 this month.
California is turning out to be one of the strongest markets, accounting for about a fifth of Fiat’s sales.
Kuniskis sees the popularity of the vehicle in the auto crazy state as a good omen. “Anything that works in California will spread across the country,” he said.
Fiat has been helped by a combination of factors.
High gas prices make the 500, which gets more than 30 miles per gallon in combined driving, more attractive. An advertising campaign that included spots by Jennifer Lopez and a sexy Super Bowl commercial starring model Catrinel Menghia created buzz for the brand.
Kuniskis said consumer awareness of Fiat has rocketed from about 8% a year ago to more than 45% now. Moreover, seeing cars on the road is reminding people that Fiat is back in the U.S. market, he said.
The company also is making headway pitching cars as a fashion or lifestyle statement. While the base model starts at just $15,500, a special $23,500 Gucci designer edition of about 2,000 vehicles will sell out, and Fiat is negotiating with the fashion house to produce another run.
The automaker is also preparing to launch a sporty version called the Fiat 500 Abarth.
Named after the deceased Austro-italian race car designer Carlo Abarth, the high-performance Fiat has track-tuned suspension and a turbocharged engine that produces 160 horsepower, compared with just 101for the base model 500.
This is a $22,000 mousesize car with the growl of a much larger roadster, hitting a decibel level that Fiat engineer Dan Fry described as “barely legal.”
“We wanted this to be a mean, wicked and evil Fiat,” Kuniskis said.
The Abarth model is positioned to provide the brand with a halo vehicle and a complementary offering to its designer Gucci model and the standard “cute” model, he said.
But there is only so much gas the brand can get out of such strategies, said Gutierrez, and Fiat will be hard pressed to sell more than 40,000 units of the 500.
“Outside of major urban areas where there is congestion and traffic, I don’t see most consumers sizing down into something like the 500,” he said.