The brand has had to leave the US twice before. Are we witnessing its third exit?
Once 2011 rolled around, Fiat, which had bought a stake in Chrysler two years earlier, was coming back to the US and dead set on making the relationship work this time. The Italian automaker had entered the US market twice before only to be kicked out, the first time because of World War I and the second because its unreliable cars earned it a bad reputation, resulting in a sales crash. Now, according to Bloomberg, we may be seeing the third collapse of Fiat’s US ambitions.
While current Fiats aren’t exactly known to be cars of stellar reliability (three FCA vehicles made it onto Consumer Report’s “Worst Cars” list this year), Americans initially gobbled up the cute, efficient, and spunky 500. Now that the novelty of the little car is wearing off, Fiat is waking up to a very harsh reality: Americans want to spend money on trucks and SUVs and could care less about small cars. As such, Fiat is attempting to reposition itself to maintain whatever foothold it has. Among the declining population that does buy a Fiat are millennials and Generation X, which make up 45% of buyers. In order to keep this population buying its cars, Fiat is slashing prices on its vehicles by about 5-10 percent and adding in standard features that were once optional.
For example, the Fiat 500L Trekking will only see a 1 percent reduction in price but will now come with heated leather seats, a Beats Audio system, and touchscreen navigation. Fiat is also attempting to simplify its lineup to avoid over-stressing customers who may gravitate to a simpler brand. To help, it’s ensuring that each of its cars come in no more than three flavors as opposed to ten variants for its 500. Despite having a subcompact SUV, the 500X, the brand notorious for its small cars may have chosen the wrong time to come back to the US, especially as sales of small cars appear to be headed towards the gutter. Its sister brand Alfa Romeo has an SUV on the way, but if Fiat wants to stay afloat, it may need to build one of its own.