Fiat’s American retailers are struggling to bring in buyers as well as pay the cost of their dealerships, but help is on the way from the parents.
On March 9, Fiat Chrysler Automobiles pitched a plan to stabilize dealers, offering Fiat stores the opportunity to combine their operations with the Chrysler-Jeep-Dodge-Ram dealers many are adjacent to, Automotive News reports.
In addition to that money-saving move, FCA will financially prop up stand-alone Fiat dealerships that decide to continue their independent operations, as well as streamline trim offerings on the model lineup.
The brand welfare is designed to halt slipping sales until FCA can get more new products into Fiat showrooms. Fiat sales slipped 9 percent year-over-year in February, with year-to-date sales down 14.6 percent.
Less than half of the 206 Fiat dealerships in the U.S. are profitable, according to FCA, and two-thirds see fewer than 10 sales per month.
The vast majority of Fiat dealerships are joined with their FCA siblings, so consolidating those operations would be an easy move, and would save the Fiat retailer in upwards of $100,000 every year in third-party vendor expenses. The move wouldn’t mean the two sides would necessarily have to share showrooms, but that’s an option being left open to the retailers.
These Fiat dealers will also be able to advertise their products alongside Chrysler, Dodge and Ram products.
The remaining 42 independent Fiat dealers will receive monthly rent assistance payments from FCA should they choose to go it alone. Sales goals and incentives would be applied to both types of operation.
Besides the slow sales for Fiat’s 500, 500L and 500X vehicles, FCA’s Alfa Romeo brand — which plans to share space in Fiat showrooms — is falling well behind schedule in getting new models into production.
The full Alfa lineup is now two years behind, and is not expected to reach dealerships until 2020.
[Source: www.goodcarbadcar.net]
Our local fiat/jeep/chrysler/ram/dodge/etc dealer has been building a stand alone alfa/fiat showroom for the last two years… Sucks for them…
They can fill up that showroom with broken promises?
Dey be stoopid. Drank too much Kool-Aid.
Wow, the 500 is 8 years old and only just recently got a facelift. Car business is a ruthless game
Back when they announced that they would require Fiats to be sold in a stand alone studio I said that a dealer would be stupid to sign on the dotted line to get a franchise. So I’m not surprised in the least that many are loosing money. Low volume and low margins don’t combine into a profitable situation
I am surprised that FCA is willing to offer assistance to those that are willing to continue with a stand alone studio rather than combine it with their other locations that sell the rest of the FCA products.
I suppose that there were a few people who didn’t have a dealership that sold other FCA products who were stupid to sign up, but around here they are all owned by people who also sell other FCA products.
Where have I seen this before, I can’t quite JeepEagleRenaultAMCPlymouthSRT recall it.
It’s almost like FCA keeps experiencing new brand mess-ups, and everything is a surprise. What, we can’t operate standalone dealers with three total models of compacts-only as a business model?
Huh, we need to innovate to comply with EPA economy regs?
Buh, it’s bad for sales if you say your current small sedan is no good and you’re dropping it?
Video game speak: This is n00b class. FCA should have way more XP than this already.
“What, we can’t operate standalone dealers with three total models of compacts-only as a business model?”
It worked for MINI.
The MINI was a better car, at a time of extremely high demand for retro products. I’d argue it’s -not- really working that well right now.
True but MINI managed to get their start that way. Granted, Fiat has been slow with the rest of the products, but the 124 is a welcome addition, and the 500X was a necessity. The 500 is a perfectly fine city car, though it could use an update, but it would be a mistake to market it in suburban and rural areas.
have you seen a 124 in the wild?
Didn’t Eagle exist solely to give Jeep dealers cars to sell after AMC went away?
Of course, now every Jeep dealer I see is Chrysler/Dodge/Jeep/Ram, much like how every GMC dealership I see is either Buick/GMC or Buick/Cadillac/GMC.
Not really. Part of the deal when Chrysler bought AMC/Jeep from Renault was that they had to continue building the newly released Medallion and Premier sedans for x amount of years/units. Since these were originally branded as Renaults, they name had to be changed. Instead of throwing a Dodge/Plymouth/Chrysler badge on them, they named them after AMC’s old crossover wagon.
Maverick has it correct – Eagle was just an outlet for Renault products at the beginning.
It’s interesting how -late- in the game they decided to call it Eagle. There were test cars given to magazines (like MotorWeek) badged as a Renault Premiere. Wonder if any of those made it into circulation. That’d be a rare thing indeed.
https://www.youtube.com/watch?v=Ww9DgXKe-gg
I’ve always liked the Giugiaro styled Premiere. If it were built by someone other than AMC on Renault bits, it might have done well.
The Intrepid was a Premiere copy assembled from Chrysler bits and it certainly could have been done better…curse that awful failure-prone transmission, and all of Chrysler’s failure-prone 90s transmissions.
Just think how MANY Intrepid models they sold when those were new. That styling got everybody on board, and they were everywhere. If they had been reliable, Chrysler might have had a different fate. Booming with the new Ram, then the Intrepid follow up.
IIRC, the Premier used engines bought from Renault, and the contract for the acquisition of AMC required Chrysler to buy a certain number of engines during a 5-year period. The easiest way to meet that commitment was to keep building the Premier.
NoGoYo, the Intrepid was built on the Chrysler-developed LH platform (along with the Chrysler Concorde and Eagle Vision). No relation to the Premier, which was rebadged as the Dodge Monaco.
I also seem to recall that Bob Lutz was keen to dump the Premier at the earliest opportunity. NIH, presumably?
CoreyDL – maybe they fired everyone that made the bad decision and their replacements didn’t get the memo.
Fiat never should have returned until they got their reliability up to a place American consumers demand. We remembered terribly unreliable, cute little cars, and Fiat returned with just that, again.
Plus, the 500, while adorable, is a fashion product. You can’t leave that unchanged for years and years. Everyone who thought the 500 was cute bought one years ago. With no updates since, why buy another?
It’s the New Beetle problem.
Which could also turn out to be the MINI problem, and the Camaro problem, and the Challenger problem. How do you refresh the styling of a car that’s meant to look like its 40-50 year old predecessor?
You can’t, unless you do a major redo and step away from the retro styling. The Challenger for example, is about at its end I think. It’s had a restyle but doesn’t really look different. Everyone who wanted one has it already.
So I’d think the next gen will either get cancelled, or go away from retro styling.
I notice the Mustang wasn’t mentioned in that list. That one actually did manage to evolve in it’s redesign, still maintain some of the “retro” pieces, but also look like a new vehicle. I tend to think VW did OK redesigning the “new” New Beetle too. I think if Fiat is going to redesign the 500, the styling may have to resemble the 500X with a little additional evolution added.
Indeed, the Mustang has been the only one to maintain retro yet distance itself from the 04 retro party (which looks so poor now).
I don’t think the Beetle went far enough, but not sure if I can blame the poor sales on diesel issue explosion or consumer distaste for Beetle.
Today’s Fiats are holding up relatively well on the roads.
Here in California, Fiat’s largest market, I don’t ever see Fiats getting stranded on the road. In fact, I don’t ever see anything getting stranded on the road by mechanical problems save for the occasional BMW or Tesla.
Today’s cars are far more reliable than 1980s and even 1990s cars.
Reliability isn’t FCA’s big problem. It’s way behind delayed new models and uninspiring styling (Maserati SUV, Chrysler 200).
“I don’t ever see Fiats getting stranded on the road.”
That is a pretty low quality metric for reliability. In fact, the 500L has several known no-start issues that have showed up in magazine long term tests even. Total engine and/or transmission replacement has not been unusual for them.
Here’s Consumer Reports summary of the 500L from 2014.
“The Fiat 500L was the least reliable new car in the survey, with about 16 times the problem rate of the most reliable car, the long-in-the tooth but ironclad Scion xB.”
If you want to put your own money down to see if the 500x has gotten any better be my guest, but it’s been out for a while now, and I’ve yet to see a single one on the road.
Ltd1983, I trust you’ve seen the Jeep Renegade, which is basically the same car.
The fact that US consumers have to be tricked into buying Fiats as a reskin kind of proves my point. 99% of the buying public can read reliability studies and know to stay away from Fiat.
Sneaking them in as a Jeep might fool a few people for a couple years, but once those Renegades starting sh*tting the bed like any typical Fiat, it’ll hurt Jeep sales in the long run too. And yes, anyone who asks me about the Renegade as a recommendation it gets a solid NO as well.
I never said FCA as a whole was bright. Their only saving grace right now is Jeep and Ram, and the creep of Italian bits into those is slowly killing them as well.
Jeeps are already pretty unreliable. Thing is, Jeep owners generally don’t care. They love their Jeeps.
Considering the fact that Fiat dealers are being thrown a lifeline…….. you need to sell cars before you will have the chance to see them broke down somewhere.
I own a 2012 Abarth bought new in May of that year. I’ve put 32K absolutely trouble-free, grin-filled miles on her and I love this car. Reading many of the comments with their outdated opinions of technology and a proclivity to let Consumer Reports be their divining rod, I’m reminded of why I seldom visit here any more.
We’ve all heard of the 100 year old dude who smokes a few packs a day and drinks whiskey by the gallon.
Statistics say otherwise.
And why hasn’t the 2015 Europe facelift been implemented on US-market 500s? Boggles the mind.
I bet it’s something to do with archaic US headlight regs.
Deep in the bowels of his suburban Detroit finished basement, a bilious “Sweet Pete” DeLorenzo licks his chops in delicious schaudenfreude. At last, Sergio and his espresso-swilling minions are finally getting their “giant heaping bowl of Not Good.”
This will keep getting uglier. I imagine a dealer willing to keep a Fiat studio going as a standalone operation.
At least the 124/badge-enginnered Miata will help build some showroom traffic. But how many FCA dealers “blessed” by Sergio with Alfa-Romeo can make it to 2020 with the Italian stuff in their floor plans?
I’m really wondering how this is all going to end. Global economy is ripe for another recession (if we aren’t already in it), oil will rebound, etc etc. Unlike last time, US doesn’t have the political will, and Italy doesn’t have the fiscal means to provide a bailout. I think this next rout could be curtains for FCA.
I think you may be correct. This is a pretty ominous move by FCA.
Too bad; I was rooting for the 500X, and I’d even consider a 1.4T-6M version (not the hideous 2.4-9A). After this news, probably not. I don’t want to drive an orphaned brand.
And even more incredulous, is that once again, the dealers are now being promised that these new showrooms “will be filled with new Alphas” in 2020.
I’ve seen this movie before, and I know how it ends . . .
If I was Sergio, I wouldn’t go within 10 miles of a Fiat dealer in this country w/o a gaggle of guards.
He had an article last week talking about how the first run of franchise agreements for Fiat dealers in the US are coming up for renewal and many dealers are taking a hard pass.
This incentive structure seems to be a response to that phenomenon, but it hasn’t really been discussed on any of the other auto sites as far as I’ve seen.
If you do the maths, two thirds of Fiat dealers are doing almost no business (less than 10 cars per month), and some are doing great business.
That’s about right for the local dealers. One put in the effort, built a nice space, even brought-in a decent espresso machine. That dealer’s logo is on 90% of local Fiats.
The other 2 or 3 Fiat dealers (depending how far out of town you go) sell Fiats like they were Plymouths. All they want is to get you a 96 month loan, whitewall insurance, and fabric protection.
I don’t know why FCA doesn’t pull the worst offenders’ franchises. They are hurting the brand.
There is very little manufacturer support for Fiat dealers, and this forces dealers to either learn about the cars and build a service department from experience, or falter and offer terrible customer service.
Fiat’s US dealer network is terrible, but a few dealers in good networks are doing well.
My local dealer in CA has come a long way, from knowing nothing about the cars to being able to quickly diagnose common problems. That said, my car hasn’t really had any major issues; I visit primarily for software updates.
The dealer now even has loaner cars for any work needing more than a few hours.
The dealer point here in Indy began as leased mall space (with service bays at the affiliated FCA store), which I thought was really a wise plan.
However not too long ago they moved to a former used car lot which previous to that was a new car store that failed in 2009.
10 cheap cars a month doesn’t support much overhead, that’s for sure.
FiATSLER is already pretty much dead IMO. After buying one of their recent products and dealing with their dealers/customer service only a person that needs to be abused would really consider their products. Not one of their products made the CR recommended list and that is not an easy task to be that screwed up. Even GM and Ford had some of their products make the list.,
You’re saying that only people who need to be abused or who prefer low quality product buy from FCA. So which are you?
The ability to advertise with Chrysler dollars will help a little. But these guys have seemed tone deaf since taking over the Chrysler system. I cannot think of one clean sheet move by Sergio destined to put money in the dealer pocket. The mall outlet fashion move comes to mind. How long did that buzz last? A week? This has fiasco written all over it, especially in light of the decision to deep-six the 200 and the Dart.
Tossing the Dart & 200 was the right move. Volume is tanking. I would say they should be replaced by a rebadged Cherokee, but the ancient, awful, and most importantly fully developmentally amortized Journey just had its best year ever, with double digit % year over year sales gains since it came out in 08 and 6 digit sales volume (!!!!). Dart is questionable but I would argue the 200 was the best FCA could do in the segment, and it still completely bombed. Pulling the plug was wise.
If you had $20 million and 30 years tied up in Fiat-Chrysler would you feel secure today?
When the 500 first came to Canadian Showrooms, I was curious and went to test drive one at my local dealership. First impressions were fleeting… as it took the salesman countless starting attempts and 6 cars before he could find a 500 that would actually start. Right from the get go, I seriously had doubts about this car.
When the salesman finally found a car that would start, (a base 5 speed manual – Pop edition I think?), for the life of me I could not get used to the clutch setup and kept stalling the car shifting to first from neutral. Never had clutch / shifting issues before… even my co-pilot who later tried the car was also having a similar issue with the clutch / stalling in first gear.
Overall I liked the design of the car, but I also found the blind spot at the drivers head a tad ridiculous….which was later resolved with the addition of a driver side convex mirror.
The 500 has fat blind spots at the awkwardly located B-pillar and the massive C-pillar. It’s a little disconcerting.
But I’ll bet those 500s that wouldn’t start had dead batteries.
My wife’s 500L needs a battery tender for the car to sit for any more than a week.
Fiat’s Italian batteries aren’t that great, plus slow initial sales meant a lot of cars sat on the lot for way too long.
“My wife’s 500L needs a battery tender for the car to sit for any more than a week.”
My mom’s 20 year old 1981 Chrysler Lebaron was like that in -30C weather.
So yeah, I see that as no problem at all ;)
I kind of count needing a battery tender as unreliable. If you have a car which needs hooked up to something in order to start, and it’s not electric – that’s unreliability.
That’s not an uncommon complaint these days. I’ve seen a bunch of cars that need a boost after a couple of weeks. Seen a few Mazdas, Kias and Hondas that don’t last a week.
Now, when that problem happens in a dealer’s back lot, I suspect that it’s not a real issue. Those cars have only ever been driven a minute at a time. The dealership should have a booster pack handy.
Too many electrical monitoring systems, always working when the car is off?
In my experience that’s usually a sign there’s a module (or several) which isn’t going to sleep when it should.
It’s usually modules not going to sleep, or modules that wake-up when they shouldn’t. The later is harder to diagnose because it’s intermittent. I’ve seen Mazda entertainment units (Bluetooth module to be precise) that would wake-up at seemingly random times and draw an Amp or more.
Again, power issues on cars in back lots don’t count. Those cars may have been sitting for months since manufacture with hardly any use. That’s very different from a car that drains a fully-charged battery over a weekend.
I have that problem with my ’98 Voyager sometimes. It’s probably related to the fact that I’ve had the headlights randomly turn themselves on by themselves.
Yes to all of the above. I finally gave up and installed an on-board charger/maintainer on our Odyssey, and it gets plugged in every weekend when it sits in the driveway for 2-3 days.
This will literally add years to the battery’s life.
I have a Fiat/Alfa Romeo/Maserati/Mistubishi dealer nearby. Imagine what goes on there…..
Salesmen reading TTAC between watching porn?
Scoutdude – telemarketing while waiting for customers
Credit checks and warranty repairs?
1. DeLorenzo over at autoextremist.com predicted this long ago. He’s never been a big Sergio fan, and has said for quite some time now Ram and Jeep are all that are propping up FCA, and thank God for their dedicated troops in Auburn Hills. Even Italy isn’t buying Fiats.
2. That said, a friend and me went by a Fiat dealership a few months ago so she could test drive a 500X. Getting a car, taking a ride, and receiving some hard numbers took FOREVER, probably around 2 hours. It was ridiculous; we didn’t even bother having her trade looked at.
3. I know 5 people with Fiats of varying ages (new-4 years old). All have been very satisfied with their cars and have affection for their Fiats, much like the New Beetle and MINI folks.
4. I love the new 124 but I doubt it’ll save the franchise….
Late in 2012, we decided it was time to buy another car to be driven mostly by my wife. I briefly considered a Fiat 500 but decided, for that kind of money, especially for the Abarth model, we wanted a real car, not a cute gimmick. In my opinion, the 500 is worth $10k or $12k and the Abarth $15k. Fiat can’t make them for that. A Ford Focus SE 5-speed narrowly beat out a Mazda3 and we have been very pleased with it. Since then, Mazda has updated the 3 so I expect it would now be more refined than the Focus. Meanwhile, the 500 is still the same old 500.
“In my opinion, the 500 is worth $10k or $12k and the Abarth $15k.”
And candy bars should cost a dime, and be as big as your arm!
Is there anybody selling a new car that’s as fun to drive as the Abarth for $15K?
“Is there anybody selling a new car that’s as fun to drive as the Abarth for $15K?”
Alex, what are alternative universes? (Sorry, couldn’t resist LOL)
In Canada the 2016 Abarth is 27,995. They still have 2015’s on sale for 22,495.
A Fiesta ST is 27,349.
A Miata starts at 31,900
MAZDA3 SPORT GT starts at $28,378
Or I can buy a Can-AM Maverick X rs TURBO for $27,249.
I think we can all agree that FCA is wasting money on far fetched luxury car schemes while ignoring bread and butter cars. Marchionne would be wise to note the turnaround Ford has done by getting rid of the money losing luxury brands and focusing on the mainstream brand.
Ram needs to be folded back into Dodge, Chrysler and Fiat need to be killed, with Alfa Romeo taking over as the upper middle brand with Maserati on top. Alfa already has a history of selling subcompact and compact cars, so we can still have the typical mass market Dodges with upmarket Alfa variants. Both brands have a sporting legacy, while Chrysler and Fiat are both damaged brands with no real positioning in the eyes of consumers.
“I think we can all agree that FCA is wasting money on far fetched luxury car schemes while ignoring bread and butter cars.”
I wouldn’t. FCA’s greatest threat is in Europe, where it’s getting steamrolled by the Germans.
If you use Ford’s experience with Jaguar and Land Rover as a guide, a weak automaker trying to revive lagging luxury brands with an eye towards the high margin sales in the luxury market, it’s hard to see where FCA finds the success they want with Alfa and Maserati.
I’m not getting how this is much different than now. My local Fiat Studio is owned by the local Chevy store. It sits in the back 40 parking lot, fronting on a main bypass road that gets a ton of traffic, little two 500 showroom with two salesdude offices and a window for the receptionist/service manager. MAYBE 900sq/ft total. Everything from F&I to the actual services is done at the Chevy store across the parking lot. They do have a garage bay on the Studio, but it is only used for washing cars, near as I can see. Seems like the right way to go about selling a niche car in a small market. Has to be a VERY low overhead operation, and they were great to buy a car from.
Not surprised they aren’t doing well. I had the displeasure of renting one of these little abominations when my Saab was getting a replacement throttle module. It’s pretty, but within beats the heart of an 80s economy car.
Well I thought the 500X looked fairly attractive in terms of styling both inside and out so I went and read up a bit on it. How FCA somehow managed to make a 180HP motor and a 9-speed transmission in only a 3000 pound car equal a 0-60 time of 10 seconds is beyond me. You’d think this meant that they geared it for crazy good fuel economy or something but at 24-25mpg combined that’s not the case either.