Fiat 500 fails in USA: the product, stupid

It was not a surprise but it is still shocking: Fiat brand is leaving the US market after 8 years after the reintroduction. It is not the official version, as the announcement only concerned the Fiat 500 model. However, we don’t have to be very bold to understand that without the iconic 500, the brand is technically dead. Who to blame?

The drop of the most popular Fiat model in USA comes as a result of some years of sales declines. Fiat as a brand is due to continue operations through its dealerships, service points and the sale of the Fiat 500L, 500X and 124 Spider. We must remember that the group’s name is Fiat Chrysler Automobiles, and Fiat is a key element of it.

USA is not Europe

One of the main reasons why the Fiat 500 experiment in USA failed is not related to the car itself but to the management inside FCA. As the model got old and it sat in a segment that has never been popular in this market, Fiat struggled to keep the attention from the public. The Fiat 500 was introduced in 2011 and since then it never received a restyling .

When it was created, the 500 targeted mainly the European drivers. It was designed to please the taste of the consumers of this continent. Then this car arrived in other countries like Japan, Australia, Brazil and North America with moderated success. The dealers in these markets depended on the Italian head quarters’ product plan.

FCA can manage the consumers in Europe through limited editions, and good marketing; they simply can’t replicate that formula in USA, where city-cars are not popular and the Fiat 500 doesn’t have the heritage it has in Europe.

The problems emerged when the demand in North America started to cool following the lack of updates. In Europe, the 500 continues to dominate the A-segment despite its age (12 years). It is not the case in USA, where the iconic Fiat turned 8 years with not even a facelift. FCA can manage the consumers in Europe through limited editions, and good marketing; they simply can’t replicate that formula in USA, where city-cars are not popular and the Fiat 500 doesn’t have the heritage it has in Europe.

“The product, stupid”

Even if the Americans don’t like small cars and SUVs and trucks continue to gain traction, Fiat would have succeeded in this market if it had a consistent product plan. The second generation of the Fiat 500 should have arrived at least in 2014 and one year later in USA.

If the product is there, and it is consistent with the positioning of the brand, a brand like Fiat can find a decent place in a market like USA. However, if the product is not updated (in terms of restlyings and new generations), and it plays in an unpopular segment, it is inevitable to have this fate.

Source: Goodcarbadcar, Autonews, JATO

6 thoughts on “Fiat 500 fails in USA: the product, stupid

  1. It surely can’t make sense to continue 500L (fewer than 100 units/month) and 500X (200-300 units/month) after the 500 is gone — are they just going to sell out the inventory?

    The 124 is a low-volume model as well, but maybe profitable enough that it could be sold alongside Alfa Romeo models? Alfa Romeo dealers certainly could use another model in the showroom.

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  2. I suggest to give 500 Giardiniera and the next gen. 500X a try – if former is actually a C-segment car with strong personality, and latter will improve its price range. I also wonder what Fiat can do in order to something suitable for Americans.

    And quality dealer service too – and, better dealership streagy. Fiat’s idea of independent dealerships weren’t successful, thanks to lack of dealership spots.

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  3. I never understood FCA and their global plans. Look at the Koreans current line ups. They are specific to the market, such that many car styles are not present in every market. FCA has a great portfolio of brands and should be using them far better. FIAT has an eclectic range from the 500 to the Toro. It should focus on being a Mini competitor with the 500 range, leaving Chrysler to be the sub premium competitor to Toyota, VW and the Koreans. The 500 could be sold alongside Alfa in the US.

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  4. Felipe i think your wrong about the 500.what makes it cute and timeless is it’s design so to change that would destroy it’s sales globally, just look at the Germans they hardly change at all their designs when they undergo a refresh every seven years. The reason they have struggled with the 500 is because Americans don’t like tiny cars that’s why they buy pickups and SUVs etc.

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