Puh-lease. The idea that American motorists yearn for small, stylish, Italian cars is nuts. OK, maybe YOU do. But YOU are not the average American motorist. And this is not 1951. Or 1961. The U.S. market is saturated with strong brands selling first-class automobiles that cater to Joe Public’s every vehicular need, from stylish, miserly city runabouts to gas-guzzling, SUV cum blingmobiles. It’s worth noting that the market for new cars really, really sucks. What are the odds that consumers swimming backwards underwater will want to take a flyer on a completely untested brand selling a brand spanking new product? Did I say untested? See, now that’s funny. Fiat in the US? OK, sure, branding these [smoke a] joint ventures as Chryslers or Dodges will sort that little legacy issue right out. See that? Did it again! C’mon. You’re the Best and Brightest. Surely you know that this Fiat thing is a non-starter, from the non-start to the non-finish. Finnish! Didn’t Porsche build Boxster in Finland? I reckon a Finnish brand would have a better chance in the Land of the Free than Fiat. You?
No.
As much as I would love to have the chance to buy Fiats and Alfas over here, realistically, both companies would collapse in on themselves in a massive vortex of failure.
Maybe a company with a chance of survival could bring some of that Italian driving fun over here.
I don’t care whether or not Fiat can “save Chrysler.”
I would however, love to see new Fiats and/or Alfas available in the US; if Chrysler is the mechanism whereby they arrive, then so be it. I care not, as long as they get here.
That said, if I were to play along and answer your question asking whether or not Fiat CAN save Chrysler, my response would be that IT WOULDN’T HURT!
Seriously. Chrysler is at the bottom of the barrel right now. Fiat can’t possibly drag them any lower. In fact, if they spun it correctly (meaning they either kept them badged as Fiats and/or Alfas OR they played up the Italian-engineered aspect of them [anything to make it clear that they’re not kin to Chrysler’s current stable of cars], they could actually help a bit, I would think. So, while it might not “save” Chrysler, it sure wouldn’t hurt.
If Fiat wants to be in the US market badly enough to pay for the channel, then yes, it could support Chrysler. If Fiat has the money of the Italian government to pay for it, then Fiat might be motivated to do it for awhile.
(Unless the US government is dumb enough to pay for the whole thing, Fiat would have no choice but to prop up Chrysler in order to make it work. Of course, we might just be that dumb.)
The Cerberus strategy was always based upon outsourcing cars and swapping them for trucks and minivans, so it will be interesting to see whether they can pull it off. I have my doubts, but whatever happens, I’ll bet that Chrysler could get better product from outsourcing than it ever could on its own.
I think this is a pretty good idea – begin bringing over much improved Fiats and Alfa Romeos to sell through Chrysler/Dodge’s existing dealers. Begin to phase out Chrysler’s products to be replaced with Fiats and Alfa Romeos.
However, putting it into practice is going to be very difficult or umm… impossible. Assuming that they are going to want to compete against on the low-end Honda and Toyota as well as all the luxury brands and Mini. How is the dealership experience going to work? As many agree, our current recession may last a little bit, can they survive until the Fiats come over? Even when (if) they do why would I spend my hard earned cash to buy an Alfa Romeo from a dealer who may soon disappear?
No, and I doubt they will be able to ultimately save themselves.
Does Anyone Seriously Believe Fiat Could Save Chrysler?
That was a real easy one – the answer is:
yes.
Fiat produces (not only by, but also with the very attractive – not only city car – Abarth 500)
generally cars people want so much folks pay for in cash.
Simple enough.
And the best of it – often forgotten nowadays by the “US capitalists”:
Fiat turns out a profit between production costs and sales in their pocket without central government breast feeding. A family run business, today financially tightly controlled (by voting shares) and honest run.
Opposite to US state supported (if not to say communistic) deficit spender colossuses, turning out steel rotting nobody wants directly to the backyard, supporting central committees headed by “Cars” with zero knowledge but political ties to the “leader in Moscow” – dancing hullalay under Champagne showers with expensive whores in large Dacias traveling, in state sponsored (e.g. taxpayer supported) airplanes with golden blades with a tin can bagging for taxpayers (john six-packs) money…
Everything clear or do you need more explanation?
And by the way, you guys (TTAC) sounded CONVINCED that this isn’t going to happen in the podcast, so I’m not even sure why we’re discussing this, unless you know something that you’re not sharing with us.
I’m willing to see Chrysler go down in flames if there’s a chance of seeing Alfa Romeos grace our American roads once again.
Details? Who cares about details? We’re talking Alfa Romeo here!
–chuck
History is repeating itself as farce. Weren’t all these same arguments made about AMC-Renault? Where did that go? Oh, right.
On the other hand, I’m going to have a hard time resisting the temptation to buy an Alfa.
I too would like to see Fiat back, but NOT with an anchor of American Iron chained to its neck.
Fiat needs to come back slowly and carefully – using Alfa, initially through Maserati dealers, as a halo. Done right, they could then expand with more affordable offerings, and a mainstream dealer network. This is about building a brand, a very different undertaking than just getting a place to sell your cars.
If Chrysler wants to buy platforms and put Dodge Hornet bodies on them, fine. But Fiat should keep it’s brand as far from Detroit’s toxic sludge pool as possible, And yes, that includes staying away from the Saturn distribution chain, too. The last thing Fiat needs is a bunch of disgruntled, polyester-suited bubbas at the front of it’s branding efforts.
Hold on…..someone actually thinks this will save Chrysler? I just figured that Bob Nardelli wanted an Abarth 500 and I figured I might grab one as well. Seriously though, unless Chrysler is paying for the privilege, how can it hurt? At least now the the car will look good and have a nice interior as it falls apart.
Also, that Abarth is hot. I’m a Lamborghini! No really, I am!
Hey Farago, aren’t you a fellow Italian-American?
Fiat should be in your blood, dude. You’ve been living in Sunny California too long. Come out East where ci sono molti Italo-Americani, and you’ll be cheering for Fiat/Alfa with your fist in the air.
It’s kind of disturbing that you aren’t more “FOR” Fiat.
Chrysler has exactly two products that are commercially viable: the minivans and the Jeep Wrangler. All Fiat has to do—and this is no small feat, considering neither company has much to work with—is float Chrysler long enough to pare it’s domestic production down to these two products.
That more or less constitutes “saving Chrysler”.
The trick is long-term viability. The best hope for Chrysler/Fiat is for GM to collapse spectacularly, leaving enough breathing room for Fiat to absorb a few million sales units per year selling it’s stuff through Chrysler stores.
The other trick is Cerberus. If I were Fiat, I would be very careful in doing business with these snake-oil salesmen, to the point where I’d insist they divest themselves of controlling ownership. Even if this means gathering together a consortium of stakeholders to offset them, anything would help.
Given the exchange rate between the lira, oops I mean the dollar, and the euro, how can bringing over razor thin profit margin fiat-econo boxes actually make Chrysler profitable?
Plus, there’s an image/branding issue here. Everybody discusses how the Big 2.8 frittered away at least a generation of buyers by making unreliable, piece-of-shitmobiles. Even if quality, design, etc have gotten better, blah blah blah, the painful perceptions of those who endured one of Detroit’s crapmobiles in the past linger on.
As they will with FIAT. Fix It Again Tony is what every FIAT owner I ever knew would say back in the day. So, even if FIATs making better cars these days, that same generational perception will still exist. I’d think 20 times over before I’d purchase one.
If it came about, it hopefully would work out better this time than that other Italian Job, the Chrysler’s TC by Maserati thing in the 80s……
Not by bringing that 500 over they won’t. The only people I see buying that thing are people who are probably already driving a Smart 4-2 or want a Smart 4-2 but don’t want to pay the overpriced price tag. There is also the whole possible school girl crazy, but how many dads will let their teenagers drive something so “unsafe”.
Fiat has much better fitting cars that COULD possibly sell well here.
I’d say, try selling a more reasonably sized Fiat in the U.S. first, and IF that works then bring of the 500; dangle it in front of the consumer and say if you like those Fiats, well take a look at this little thing… But to give Americans the first impression of a Fiat being a retardedly small 500, it could destroy the reputation for small Italian cars all together. In this case starting out small means starting out a little bigger.
@Vorenus :
Robert lives in Providence, RI, the former mafia capital of New England.
Mr. Berkowitz,
Then that makes Mr. Farago’s anti-Fiatness all the more confusing! I know Providence, and can attest first-hand to the strong Italian-American population up there.
What’s the deal, Mr. Farago? Your sentiments toward Fiat go beyond just doubt, it seems; you practically scoff at them!
(And sorry for accusing you of being from California.)
Sounds like you answered your own question. Of course Fiat – Fiat! – can’t save Chrysler. Outside of TTAC and the 5 members of the 128 Spyder Fan Club, Fiat, unlike, say Alfa Romeo, simply does not have the brand equity in the U.S. to save anyone. Do like those red leather seats though…
if people suddenly stopped buying 3 series would mini be able to single-handedly keep BMW afloat?
No.
with that said, importing attractive small cars, a sort of anti-caliber, would be cheaper then completely redoing the ugly duckling small car they produce now. maybe Chrysler will even learn how to make a fun small car without having to stuff 240+hp into it as well. but still importing FIATs and ALFAs and offering them with a lifetime limited powertrain warranty will ultimately be Chrysler’s doom
Hang on… I can’t let this statement go by without comment: “The U.S. market is saturated with strong brands selling first-class automobiles that cater to Joe Public’s every vehicular need, from stylish miserly city runabouts to gas-guzzling SUV cum blingmobiles.”
I’m sorry, that is complete and utter bullshit.
Here in America you have your pick and thousands of luxo-barge trucks, a raft of un-economical boring cars, a few standouts in the GT category, and a full range of dull Asian genericars. Very few true sports cars. Very few (and frankly very unimpressive) commuter cars, whose fuel economy numbers are at best only 50-60% as good as their Euro-market counterparts. A token few fringe freakish oddballs like Smarts, Prius’, and H2’s.
Our brain-dead and domestic-favoring emissions and safety laws keeps a whole host of “first class automobiles” out of this country. ESPECIALLY on the stylish miserly end of the spectrum. We have no choice of motive power … quick, name 4 cars with Diesel engines for sale in the US! You can’t as there are only 2 or 3, compared to how many in Europe? Hundreds?
Holy Clutch Pedal Batman… It is like finding a needle in a goddamn haystack to discover a manual transmission for sale in America!
There is an entire class of vehicle that I desire, that is complete and absolute unobtanium here in the USA, yet if I were living in the EU I would literally have my choice of 20 or more makes and models to choose from.
How then can you claim that our every need is catered to? It plainly isn’t.
Sorry this rant has very little to do with Chrysler, or Fiat… but it had to be said.
–chuck
NO. Fiat’s overall profit margin in 2008 was 3.44% according to The Online Investor. Suppose Fiat produces 500,000 cars in 2 Chrysler factories averaging $18,000 each and manages to duplicate that margin in the US. That’s a profit of about $300M. And 500,000 vehicles would equate to half of Chrysler’s projected 11% market share in a 10M unit market! How many years of $300M in profits balanced out by losses in the other parts of Chrysler would it take to pay back the TARP funds? Never??? Of course, even this assumes the cars are appealing and buyers can get over the idea of Fiat + Chrysler quality. According to Germany’s Auto Bild Quality Report, only the French sell worse quality cars than Fiat in Europe. Even Kia and VW do better! Last year was the first year in all seven years of the report that Fiat did not place dead last in the rankings. Fiat is Cerberus’ ticket out of car manufacturing. Fiat basically values a 55% stake in Chrysler for a few million dollars. Doesn’t sound like the Italians have much confidence in Chrysler either.
Short answer: NO. Chapter 7 for both Chrysler and GM!
Outside of TTAC and the 5 members of the 128 Spyder Fan Club, Fiat, unlike, say Alfa Romeo, simply does not have the brand equity in the U.S. to save anyone.
Which is why I would expect the vehicles to carry a Chrysler badge.
The issue isn’t whether Americans are pining away for Fiats — they aren’t — but with whether Chrysler can make money by selling cars made by other companies.
I’d say that the answer to that depends upon the sales level that is needed to hit the breakeven point. If they could sell 50,000 units of a given model and turn a profit doing it, then it just might work. If they need to sell 250,000 units of that same model to hit breakeven, then good luck, that ain’t gonna happen.
I don’t know whether Fiat can save Chrysler, but I do believe Americans will buy Fiats.
Forget about the costs of meeting American safety standards and then importing them. The current market simply isn’t big enough for another manufacturer. This might have worked five years ago when people were dumping their equity into new luxury cars and anyone still drawing breath could get credit, but not now.
Fiat could try. That’s it.
The Asian brands will absolutely clobber them in the United States. Not to mention the upcoming Euro Focus and Fiesta has the same business model with a far superior infrastructure.
You can’t make inroads with strong competition and their wholly loyal customer base. And good luck finding parts and service for your Fiat when they give up and leave the average customer with a modern day equivalent of their imports from the 1970s.
Sajeev, what are the Asian brands going to clobber them WITH, exactly?
Toyota / Honda / Nissan’s bread and butter is the Camry / Accord / Altima, respectively. The Fit, Versa and Yaris are good small car offerings, but they don’t compete with Mini, do they? No. That said, they won’t compete with Fiat/Alfa either.
Is the Aveo saving GM?
I think of all the “mergers” in the last 20 years, this one makes the most sense, and has the best chance of succeeding. I think it’s success will obviously depend on how wisely they arrange the product mix with Fiat-designed cars. Also, Fiat needs to utilize existing Chryco factories to build their cars in the NA zone. Lots more, of crouse but if they stick to the basics, it’ll work.
I truly believe the FIAT connection can help Chrysler, provided it is managed properly, which is where this hypothesis falls flat.
Vorenus,
The fit, versa and yaris don’t compete in the same bracket as the Mini. The Mini is miles more expensive and is more of a fashion statement. Which is where the FIAT 500’s strength comes into play.
The FIAT 500 is another fashion statement, but a cheap one (almost on par with the fit, versa and yaris). So it’s the best of both worlds. If marketed correctly, it could be a big seller.
P.S. Porsche don’t manufacture cars in Finland, as such. They are licensed for manufacture in Finland. Valmet Automotive run the factory, the staff, tooling and maintainence.
Putting aside for the moment all other aspects of this story, which have been well debated above, I would consider it a travesty if the 500 were to be badged as a Chrysler or a Dodge. Kind of like if they badged the Mini as a BMW when it’s clearly a Mini. Only worse, because Chrysler has zero cred.
Katie, we are in agreement. The 500 is more in-line with the Mini than the Yaris, Fit and Versa. I was responding to Sajeev, who contends that Fiat would be “clobbered” by the Asian brands.
@ Vorenus:
Just chiming in to note that you are dead on.
After Italia won the 2006 World Cup I personally witnessed the following here in western NY:
– Multiple, multi-vehicle convoys of Italia fans honking and waving Italian flags on several main thoroughfares.
– Hundreds of people at house and lawn parties with tons of Italia jerseys, flags, and native music.
I would argue that the participants in the above activities would probably show significant interest in a Fiat or Alfa Romeo branded vehicle on sale in the US.
The marriage of Chrysler and Fiat isn’t happening. Chrysler sealed its fate yesterday. Let us compare and contrast, GM vs Chrysler homework from yesterday.
GM – Looked like a statement to shareholders… Lots of text, numbers, charts, etc. It looked like what you would expect a multinational corporation to give you if they want billions of dollars. When it talks about bankruptcy, it mentions market share damage, etc.
Chrysler – Looked like a bad Powerpoint turned out by high school students (actually it would have been better if high school students did it)… The front page alone is hysterical. (See mocking on Jalopnik) When it talks about bankruptcy, it warns of the horrible damage to the economy if they go under. Pay us or die!
GM – Clueless, but at least sound like adults.
Chrysler – Why does Mr. Nardelli’s shop class want two billion dollars?
Government response:
GM – Treasury wired over 4 billion yesterday.
Chrysler – Your call (snicker, snicker) is important to us, please remain on the line…
Economists response:
I believe the GM plan is a starting point for negotiations with Bloom, Summers, Geithner and the rest of the Obama auto team. I expect some concessions from the unions and the bondholders, but this plan is a start.
However, I think the Chrysler plan is a joke and my guess is a bankruptcy is imminent.
Calculated Risk
I disagree with you RF. Normally I would say that that hell would freeze over before FIAT would be even allowed back in America but…
…I would have said the same for Mini.
The 500 is a ‘cute and cuddly’ chick car. Chicks will buy it because chicks don’t care if FIAT is the four letter word in Italian for “I CAN’T BELIEVE I BOUGHT THIS P.O.S.; NO WONDER ITALY LOST THE WAR!”
All of you that want (hope and pray for) an Alfa should thank your lucky stars you can’t have one.
American’s will buy the 500. There is no way our govt will allow us to be cool enough for the Abarth.
turbobeetle: “Is the Aveo saving GM?”
No, but the G3 will!
—
First, save Chrysler? Not a chance. Drag Fiat under, too, maybe.
Second, I’d like to have the option to see and, maybe, purchase a 500. I’d certainly be happy to drive a nifty little car like that. Coordinating emissions and safety standards between Europe, the US, and maybe, Japan, would be a great way to open the market to more interesting European cars and would undoubtedly save most automakers some money. Sure, the markets differ by the tastes of the populations but there’s no reason to layer on more differences through legislation and regulation. If passing Euro-specs meant that the car also passed US specs (and vice-versa), it would probably be worthwhile for Fiat to open a showroom in NY/NJ and test the waters.
@Pch101
Which is why I would expect the vehicles to carry a Chrysler badge.
Agreed. But still…perhaps I’m vastly underestimating how gullible the general car-buying public is, but I find it hard to fathom that anyone would believe that the company responsible for the Aspen and Ram would build something like the 500. Particularly with the searing spotlight under which the Big 2.6 find themselves, it would likely play out as a poorly kept secret and a worse failure.
“Does Anyone Seriously Believe Fiat Could Save Chrysler?”
Definitely not within Cerberus or Chrysler. Hopefully not within the US government.
Vorenus:
Let’s see. Farago is critical of the idea of taking Fiat platforms, making them in Mexico, and putting Chrysler logos on them.
I’m pretty sure that makes him pro-Italian.
The last time Chrysler joined up with an Italian brand we got the Chrysler TC by Maserati.
Hardly a point of pride for the Italian people.
Is ChryCo looking at 4-brand dealerships that look like this? Messy, if you ask me:
Fiat: small cars and MPVs
Chrysler: not-so-small cars
Dodge: Ram/Caravan and what-not
Jeep: soft- and off-roaders
Re-introducing Fiat with the current lousy economy and fierce competition is going to be a major challenge in the States, although not impossible. (Heck, even our cheapskate household has a couple of Peg-Perego strollers.) Economical and well-engineered cars can grab a toehold, if not more, example: Hyundai. But saving Chrysler? Tall order. Count me a skeptic.
About the appeal of the Fiat 500: let’s not forget that BMW just laid off 850 workers at the MINI plant earlier this week.
Fiat’s time would be far better served courting all the Saturn dealers that will soon have nothing to sell. At least they’re trained to provide a positive dealer experience, unlike the last time Alfa hooked up with Chrysler in the early 90’s. The typical Chrysler dealer just doesn’t know how to sell these cars and is apparently too lazy to try.
Fiat could make a dent in the US market but not by hitching their star to the catastrophe that’s Chrysler. There are much better ways of doing this.
Nobody in the US is going to give a damn about the 500, especially if it says Chrysler, but even if it says Fiat. The retro thing is getting very old, and the proportions aren’t that great.
A very small car at Chrysler dealers cannot compete against the Mini. Chrysler won’t be able to get as much for the 500 as Toyota gets for the Yaris.
In term of driving dynamics Clarkson has said that the Ka/500 is crap compared to the Ford Fiesta, which will be coming to the US.
No.
Fold up Chrysler immediately. Run the Bankruptcy course proceedings effective now. Let someone buy the Jeep brand and let the rest vaporize.
Enough of my wallet being pried open to support this “Zombie” company that will only negatively affect the other responsible and better managed auto companies.
We are pissing around with a mature 100 year old industry that is frought with too many players and too much overcapacity. Creative destruction needs to happen immediately. Cull the weak by starting with Chrysler…R.I.P.
@no_slushbox :
February 18th, 2009 at 11:28 am
Nobody in the US is going to give a damn about the 500, especially if it says Chrysler, but even if it says Fiat. The retro thing is getting very old, and the proportions aren’t that great.
I drove a 500 and I can say – if you would have sitten beside me or have driven one yourself for 10 minutes, you would stay with me:
The 500 is a very modern equipped, luxurious, easy to handle, very fast great car.
Its a car people want from a company turning out a profit to its buyers, owners and shareholders. Not to forget the US taxpayer.
So your right – The Fiat 500 its the anti-Chrysler from every angle you look at it.
Not a chance! If they had taken Fiat’s two smallest designs and slotted them in to the bottom of the range when they killed the Neon, they might have had a fighting chance. But let’s face it, the foremost legacy of FIAT in NA is poor reliability and appalling rust problems. And Chrysler has suffered from the perception of poor quality also. So, not a lot to inspire confidence. Pity in a way…that 500 is pretty neat.
Fiat’s will have horrendous reliability. I am not saying this due to their past; I am saying it due to the present record of all European makes. Europeans put a higher importance on tactile quality and feel, and a much lower importance on maintenance & reliability than American and Japanese makes. That’s why they consider VW’s to be high quality, and we consider them to be unreliable money pits. It may work for BMW & Benz because they can afford to offer free maintenance programs since they sell high-end vehicles. It will not work for volume cars, though. No modern European car has succeeded in the middle-class US mass market.
p.s. I would love to have an Alfa
I find it hard to fathom that anyone would believe that the company responsible for the Aspen and Ram would build something like the 500.
I don’t believe this to be relevant. The issue for Chrysler is its breakeven point under this new model.
Let’s say for the sake of argument that Chrysler can dramatically reduce its overhead by getting out of the passenger car production business. Let’s say that it can cut a deal with Fiat to buy cars designed and assembled by Fiat at some wholesale price.
The issue then becomes one of whether Chrysler can sell the cars for more than it paid for them. The potential benefit is this: If the fixed cost structure is substantially lower, then that probably means that it could reduce its sales volumes and still make a profit.
Under this scenario, it may be possible for Chrysler to make more money, even if it is selling fewer cars, just by changing the cost structure. The focus would be on creating margin, more so than market share.
The primary risk to Chrysler under this scenario is having partners who do their part. If Fiat does a lousy job, or delivers product late, or makes other mistakes, those hits go directly to Chrysler, even though Chrysler would have little control over the outcome.
It’s difficult to judge the long-term viability of this plan without having specific numbers to go with it. I doubt that you’ll be getting them out of Cerberus, and I doubt that the terms have even been fully negotiated.
But regardless, I would expect that Chrysler is going to try to source its compacts and midsized sedans from other companies, such as Fiat and Nissan. This was always the plan; now, it’s just getting more attention because of the bailout drama surrounding it.
Hey Justin Berkowitz
@Vorenus :
Robert lives in Providence, RI, the former mafia capital of New England.
As an Italian-American from Providence AND a former Fiat owner–I resemble that remark!
And another thing… Not only can Fiat NOT save Chrysler, but Chrysler CANNOT save Fiat!
Why would anyone think that chaining a rock to an anchor would make the combined objects float?
Does Anyone Seriously Believe Fiat Could Save Chrysler?
No. If the market is allowed to work and weak brands are allowed to fail, Chrysler is dead. I predict that Hyundai/Kia will take over the role of lower cost value brands from Dodge and Mitsubishi. I hope some company buys Jeep, the Dodge Ram, and anything else with a Hemi option at keeps it alive. I wish the regulatory barriers to entry were lower so people who want a Fiat could buy one, but I don’t see Fiat as a high volume brand in the US.
Robert Frankfurter:
“I drove a 500 and I can say – if you would have sitten beside me or have driven one yourself for 10 minutes, you would stay with me: The 500 is a very modern equipped, luxurious, easy to handle, very fast great car.”
So is the Yaris. And particularly the Honda Fit.
“Here’s the thing, though. Subsequent investigation revealed that Ford hasn’t got the Ka wrong at all because despite the Ford badge, despite the Ford styling and despite the Ford fixtures and fittings, this car, actually, is a Fiat 500. It has the same basic structure and the same engine. It’s even built in the same factory, in Poland.
The fact that it’s come out of the joint venture so wrong demonstrates two things. First, that the Fiat 500 must be a fairly bad car as well, but neither I nor anyone else has noticed because it’s so lovely to look at and so delightful to own. And, second, that we’re all doomed.”
http://www.timesonline.co.uk/tol/driving/jeremy_clarkson/article5574385.ece
Maybe one or two people will buy this thing if it says Fiat on it, but if it says Chrysler on it it’s doomed.
Chrysler can go into chapter 11, the dealers can get lost, FIAT can come out of it with a range of trucks and SUVs to sell at their existing US dealer network… FIAT already knows how to do business in the US as owners of Case New Holland.
Chrysler is finished as a “car” company. If FIAT wants to get into the US auto business the obvious route is to head to the subsidized South where states will fight tooth and claw for the “investment”, in the meantime they can send surplus tooling and second hand designs to Chrysler for no cost
@Pch101
I disagree. Perception in the marketplace is very relevant – perceptions regarding quality, safety, performance – these have all buoyed or torpedoed brands, warranted or not. No one will be fooled by 500 with a winged emblem out front. Everyone will know it’s a Fiat, and the perception, at least in the U.S., is that Fiats are unreliable rust buckets.
In any event, you still have to have buyers. Even if your assumptions regarding costs, production quality, and the other aspects of the back end are true, it won’t be worth a fart in a mitten if no one buys the cars. My point is simply that a tiny, re-badged Fiat, or a series of re-badged Fiats of any size, is not going to save Chrysler. Period. I like the 500, as do many here, but I suspect the vast car-buying public would, a) realize that these are re-badged Fiats and, b) not buy them. Chrysler needs a viable competitor to the Accord and Civic, not niche vehicles like the Smart and MINI.
I think we probably agree somewhere in all of this, but just coming at it a different way.
Guess who’ll get the bill for Bankruptcy plus all the unpaid TARP loans when 55% owner Fiat realizes it can’t make Chrysler work? Bury this dog now!
No. Simple as that. It’s not a viable plan. It’s a pipe dream. It’s window dressing for “We DO have a plan. Honestly.”
Initially, the idea of having access to Alfa products sounded great, but the more this issue is discussed, the more I’m realizing doing this deal through Chrsyler is idiotic. Chrysler doesn’t have the time to change their cost structure to get out of the passenger car business fast enough.
If they had done this deal a few years ago, it might have worked, but now?
The only thing that can save Chrysler is Exxon/Mobil’s cash flow. Exxon/Mobil is too smart. Americans won’t buy Mexican-made badge-engineered Fiats sold at Dodge and Chrysler dealerships.
Americans are not storming Suzuki dealerships to buy badge engineered Fiats made in Japan. Americans didn’t when gas was $4 per gallon.
Badge-engineered Mexican-made Fiats sold at Dodge and Chrysler dealerships will have to compete with American-made Hondas and Toyotas, which already sell really well.
American car dealerships have a successfully proven over the years that they are incapable of selling imports in their domestic showrooms. Ask yourself when was the last time you saw, on the streets of your American town …
– Ford Capri. Once sold at Mercury dealers.
– Ford Fiesta. Once sold at Ford dealers.
– Ford Cortina. Once sold at US Ford dealers in miniscule numbers.
– DeTomasa Pantera. Once sold at Ford and Mercury dealers.
– Alfa-Romeo Spyder. Once sold at Chrysler dealers.
– Cricket. A Hillman-Talbot product once sold at Dodge dealers.
– Buick/Opel by Isuzu. German designed cars, made in Japan, once seen languishing on the lots of Buick dealerships.
– Plymouth Sapporo/Dodge Challenger. Plymouth Arrow, Dodge Colt. Dodge Colt Vista. All well-made Mitsubishi products.
– Renault Alliance & Encore. Dodge Monaco. All badge engineered Renaults, once sold on AMC and Dodge dealers with the hope of saving AMC.
– Nash Metropolitan. A British car once sold at your Nash dealership. That sure saved Nash!
Captive imports don’t sell. Badge-engineered European cars that are built in the U.S. or Mexico don’t sell.
We’re throwing good money after bad. Let Chrysler go. Let GM go. If foreign-controlled companies what control of Chrysler’s assets, let them buy the assets at fire-sale prices.
By the way, like many of you, some of my retirement funds are invested in firms that own bits-and-pieces of Chrysler and GM, along with other companies that have come and gone. Did we bail out the companies that made conestoga wagons? What about those hoop-things that kids would roll with a stick? Did they get a bail-out?
Nope.
That’s life. Get over it. Let’s put our money where it will do some good.
Fiat save Chrysler, no. Sell enough cars to support a niche brand yes.
The MG-Rover family English cars had hardly built a stellar reputation in the US. Prior to the Mini the last attempt was the Sterling, a Honda built by Rover and sold in the US as a Sterling; because they thought not admitting to its Rover heritage would be a plus. Dismal failure. And yet, a decade or so later, the Mini is a runaway niche market success which is surely making money.
Mini and Smart are the existence proofs. At the high end the reinvention of Maserati was also doing quite well until the troubles.
On another note, VW should be doing relatively well in the US, but isn’t. Audi is doing fine, yet the masters at VW can’t seem to figure out how to build reliable enough vehicles and then market and support them in the US. The moderately priced European style car has a good sized market opportunity in the US, but VW continues to screw it up. Fiat could in fact be that company. Most of the buyers would be under 30 and know nothing of Fiat’s US history. They do know that they like cheap and cheerful vehicles with attitude … something almost nobody is providing. Scion is screwing up, VW blew its chance and Honda is moving away from the youngsters as fast as it can.
i would like t see some fiats and alfas on the road here. for people who like cars like thia there is only mini cooper! however i am not sure they will sell outside of cities. For mini, this is enough. i hope it is enough for chrylser/fiat.
My vote is for Nanjing Auto/SAIC, allowing us to re-invigorate the American Leyland moniker.
No – Fiat has enough problems in the European market without attemting to make it in North America which is a market they have little experience with. For niche products it would definitely work but Chrysler doesn’t need a niche product, they need a mid size sedan that doesn’t make people puke. And they needed it yesterday.
Fiat should just buy the Saturn and Saab dealer network from GM. Hundred million should do it, or is that overpaying?
I’d buy a Fiat if it was offered in wagon form, with an efficient, powerful turbdodiesel option. A Fiat TD wagon would be the cat’s ass since VW seems to have problems comprehending diesel wagon demand in the US. Otherwise, Fiat is more useless to me than Chrysler. The only thing good that Chrysler has is its vans, which consists of the Caravan, and the Sprinter. Everything else is disposable. I think Fiat could help Chrysler, but the “Fix it again Tony” problem would have to be resolved. How? Look at what Hyundai’s done with their warranty and follow their lead.
It is all about product. Fiat is already having comparative reliability problems in Europe and fit and finish problems. How do you expect Fiat to save Chrysler? By pushing fiat to give all her platforms so Chrysler can do nose jobe and botox injections.The history is repeating itslef again. All companies sooner or later run their asses away from Detroit companies, because for only one reason,- detroit can excel at anything but engineering. But, weirdly enough, car manufacturing is about – car engineering.
As long as you give a chance to snobbish Jeremy Clarkson to deride your plastic shoddy interiors, but instead of listening to him you call him a jerk, nothing is going to change. What is Chrysler`s plan? to suck Fiat/Alfa/Lancia dry by rebadging their cars and selling as Chrysler Megaflytes? While Fiat will offer their small displacement turbocharged engines, Chrysler in return will give a technological marvel to Fiat- a parking lot and a dealer`s office. WOW! When was the last time english speaking engineers created a brand new floorpan? Anyone?
Um, Renault buying AMC…that went well, didn’t it?
Americans are not storming Suzuki dealerships to buy badge engineered Fiats made in Japan.
Point of order: the SX4 is not a “badge engineered Fiat”; the Sedici is a badge-engineered SX4 (though both share styling by Italdesign). Both vehicles are produced for the European market at Suzuki’s plant in Esztergom, Hungary.
That being said, I wouldn’t mind getting my hands on either vehicle, equipped with Fiat’s 1.6 L or 1.9 L turbodiesel….
Of course Chrysler can’t be saved by Alfa alone. It’ll take much more, and some luck, too. As if they showed up in front of the Feds yesterday with just a picture of that Bob’s Big Boy Alfa 500 and a really big tin cup. Although, their 4th Grade Powerpoint presentation didn’t bode well, either. So maybe they should have just talked about that cute little Alfa.
FWIW, I would buy one of those in a second.
1) Communication: The Italian way of communicating is much closer to the American way than the German way is.
2) Knowing and redefining one’s game in times when others are beating you at your own game: FIAT just did it. Very successfully.
3) Reducing cost while improving the soul and mechanicals of one’s product: Daimler never had to do that. Fiat just very successfully implemented this with their own brands.*
4) Advice: Hire Ralph Lauren, the ultimate conveyor of tasteful and meaningful Americana worldwide.
That’s the smartest answer so far. Hire me, someone.
(* Except: They might screw up Ferrari with too much short-term cost savings)
Chrysler can go to hell, but I would LOOOOVE to get seat time in an Abarth 500.
Fix It Again Tony?
Really I don’t think so. Having experienced some of FIATs finest and having gained an understanding of their rather poor production engineering and iffy chassis development I cannot see Chrysler (the company that bloodied the mighty Daimler let us not forget) being helped.
Having said that I am currently renting a Dodge Caliber and it is one of the most woeful cars I have ever had the misfortune to drive. So an alliance with FIAT would improve things just nowhere near enough to save Chrysler.
“Robert lives in Providence, RI, the former mafia capital of New England.”
Mr Farago, FIAT axed me an’ Louie here ta come have a little talk witchoos. Nice little blog ya got here. Shame if anythin’ happint to it, knowwhatImean?
Only the taxpayer tit can save Chrysler now…How can anyone believe otherwise? Obama just stole $75B from the taxpayers to bailout deadbeat mortgage borrowers so 2.451 will have no problems getting a sizable tit.
aren’t we already seeing Alfa’s in the US? ie, Alfa 8C through Ferrari dealers?
I do kinda want an Abarth 500 SS, even though I’m sure it’s a bad idea.
and really, a 149 when it comes out.
I didn’t have time to read the comments, but yes, RF, I think you are spot on.
Anyone who can remember the last time Fiat was here won’t even give them a try. Anyone younger can choose, as you point out, from a wide variety of autos from reputable makers.
@John Horner :
Mini and Smart are the existence proofs
But they are also proof of PROCESS! Both arrived here after long, expensive and carefully-crafted marketing and branding efforts. AND they arrived in BMW and Mercedes dealerships, respectively.
Fiat will NOT sell if they are seen as the crappiest European car (I don’t care about facts here, only perception) flung into the crappiest US brand’s showrooms as a last ditch, desperate, effort.
No one will be fooled by 500 with a winged emblem out front. Everyone will know it’s a Fiat, and the perception, at least in the U.S., is that Fiats are unreliable rust buckets.
For one, I seriously doubt this. Most car buyers know little about cars. Many of them are young enough to not even remember Fiat, and if Fiat’s name isn’t on the car, they won’t know to ask.
In any case, I think that you miss the real challenge. Basically, the financial question is this — can Chrysler reinvent the business model to use outsourcing in such a way that it can make a profit while selling fewer cars?
I don’t know the answer to that, but it’s a fundamentally different challenge from GM’s, which needs to figure out how to survive while selling fewer cars, while simultaneously selling them at higher prices. GM can’t radically cut costs, despite what it may claim, and the UAW chatter is a distraction to hide the fact that the union is not at the heart of the problem or the solution. GM’s only going to survive in the long term if it can build enough brand equity to sell cars for the same kinds of prices that Toyota can, and I wouldn’t count on that.
Chrysler is in a different position. It is betting the farm that it can sell cars made by other companies, so as to avoid much of the overhead associated with that production.
Assuming that Cerberus can create the relationships to do this (which surely is debatable), the big question for Chrysler to address is this: How many outsourced cars must they sell in order to make this outsourcing plan work?
If the answer to the question is “a lot”, the odds are much worse for them than if the answer is “not that many.” Since I don’t know the answer, I am going to reserve judgment until I can at least guesstimate that number. High numbers, bad; low numbers, maybe good.
No. Chrysler died the day that Daimler sold them off. Deal with it.
Fiat have two strengths – stylish small cars and their powertrain division, which is world class (they developed the common rail diesel and other stuff). However, they are not strong in the mid-range size, which is probably what Chrysler needs the most.
Anyway, I am very happy with my Fiat Grande Punto – decent quality, nice style, well put together (much better than earlier Fiats). But I am probably genetically pre-disposed towards Fiats – my family has owned some 20 or so Fiats…..
Actually I believe Chrysler died the day Daimler bought them. Just look at all the great product put in thier pipeline during the Daimler years.
No, Fiat can’t save Chrysler. It will take a couple years before Fiat can get a car ready to sell here and Chrysler doesn’t have that much time. In the unlikely event that Chrysler can hang on long enough for Fiats to arrive on our shores, that still won’t save Fiat.
Fiat is barely hanging on in southern Europe, which is a far more hospitable marketplace for Fiats than the US.
No one will be fooled by 500 with a winged emblem out front. Everyone will know it’s a Fiat, and the perception, at least in the U.S., is that Fiats are unreliable rust buckets.
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“For one, I seriously doubt this. Most car buyers know little about cars. Many of them are young enough to not even remember Fiat, and if Fiat’s name isn’t on the car, they won’t know to ask.”
I’m pretty sure they’ll know it’s a Fiat by the time they’ve signed the lease. Do you think tricking customers into buying an unknown brand is really the key to success? Scion worked, but ask Daewoo and Isuzu whether true small volume foreign carmakers can keep up in this economy. Hell, ask GM if the world’s largest carmaker can keep up in this economy. The answer’s clearly no.
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Retardsparks: Fiat will NOT sell if they are seen as the crappiest European car (I don’t care about facts here, only perception) flung into the crappiest US brand’s showrooms as a last ditch, desperate, effort.
Truth spoken.
I’m pretty sure they’ll know it’s a Fiat by the time they’ve signed the lease.
Most of them won’t, and even if they did, it won’t have the same meaning to most of them that it does to you.
Most Americans commenting about Fiats haven’t seen one for three decades. In the flesh, they may be appealing enough to appeal to some percentage of the US market, just as they do elsewhere in the world. That market may not include you (or me, for that matter), but it doesn’t have to in order for it to be a profitable venture.
The issue for Chrysler is the number of sales that will be necessary to hit a reasonable profit target. If the sales level is low and the wholesale price is right, selling some quantity of rebadged Fiats at retail could be more profitable than is building and selling Calibers, many of which go to rental. If hitting a low sales target is enough to generate a profit, then the idea may work.
Jared above makes a more salient point, namely that the whole thing may take too long.
No, nothing will save Chrysler.
Personaly, I just can’t wait to see that shiny new Alfa Romeo 300C parked right next to a Dodge 500ss.
“Does Anyone Seriously Believe Fiat Could Save Chrysler?”
YES!
From having to go out and find someone to buy those big metal-stamping machines and other auto-assembly stuff.
FIAT has one thing to offer. Efficient, reliable,low emissions (which seems to be a big selling point, smooth running turbo diesels. There are many modern turbodiesels that have better performance, mileage, and emissions than a Toyota Prius.
Having driven a FIAT Grande Punto down the Italian peninsula at 180 kph (112 mph), I can honestly say they are not the FIATs from an earlier era. The handling as well as the fit & finish of the car were better than many of the offerings of US and Japanese/Korean brands that have been selling here for years.
As far as rust problems are concerned, FIAT’s main supplier of steel in the 70s & 80s was a Russian Mill which sold them a lower quality product. Not all FIATs were rust buckets because you still see many of the older 500s on the road over there. In fact, there is a company here in Brooklyn that restores the orginal 500s for $9000 bumper to bumper.
As far as there being a market for FIATs, one only has to look at the Honda Fit to see that sporty sub compacts can sell in the US. The new Fit is supposed to be a great handling car, but every time I look at one, I see a tiny minivan with the severely raked windshield. I haven’t met anyone who likes the style of the new design.
The Mini is in another class by itself because after you buy a base model and add some extras, you’re looking at $35,000.
Fiat can create a niche by offering attractive, sporty, and reasonably priced cars to the US auto public who are looking for a daily ride and only carrying themselves or one to four people.
As far as the American public focusing on FIAT problems of the past, remember Fords in the 70s & 80s. They built low quality cars until the Taurus in 1986. The employed an NYU Statistician, W.E. Deming to redesign the assembly line and thereby boost the quality of the Ford product. It can definitely be said that the Taurus saved Ford Motors. In case you don’t know who W.E. Deming is, he also helped to set up Toyota’s assembly line in the 60’s and we see where Toyota is today.
As long as FIAT buids its cars in North American plants and pays attention to quality, it has a shot. As far as recognition, just wait for an action movie to come out and show what the car is capable of(Italian Job 2?). Product placement works.
Americans just have to wrap themselves around the fact that real driving is more than pointing the steering wheel stright and stomping on the gas. Low horsepower cars can be more fun to drive than their 300 hp bretheren. After all, where can most of us drive more than 70 mph without getting pulled over.