Fiat’s North America Chief Exits as 500 Sales Continue to Disappoint

Fiat North America brand chief Laura Soave has been ousted from her position as sales of the Fiat 500 continue to disappoint in the U.S. During Soave’s tenure at Fiat, 500 sales have failed miserably to meet 2011 goals, and the marketing plan for the car has been widely criticized. Only 101 of Fiat’s 130 dealerships managed to make even one 500 sale last month, according to a report from Automotive News.

When the Fiat 500 was introduced to North America back in March, Fiat had high expectations for the retro-chic hatch, expecting to sell as many as 50,000 500s by the end of the year. As of October, sales were way off pace, with only 15,820 having been sold to date. To make matters worse, Automotive News reports that the automaker has roughly a half-year supply of 500s, with some 13,730 units on hand. Fiat 500 sales peaked in August at 3106 vehicles sold. Last month, only 1965 were moved.

Fiat execs have differing reasons on why the 500 has failed to meet expectations. Automotive News reports that Fiat CEO Sergio Marchionne blames the dealer network for slow sales. “I think Fiat had 50 or 60 dealers [for most of 2011]. I think Ferrari has more dealers than that,” Marchionne said. Fiat global head and Chrysler’s Chief Marketing Officer Olivier Francois reportedly said that a comparison of the brand’s supply is unfair because, “A brand in the launch phase is not the same as a brand that has been around for 85 years."

Many at Fiat including Francois believe that slow sales are also due to poor marketing. Automotive News reports that many dealers say Fiat was slow to market the 500 upon its initial rollout. Francois recently told Advertising Age, "I don't think we have a car problem; people love the car. I think we have an awareness problem."

Another issue might be the Jennifer Lopez commercials that Fiat rolled out in response to dealer complaints. Many execs from other automakers have quietly whispered that Fiat fumbled the ball with the J.Lo spots, potentially alienating a male customer base. This might be why Fiat has been amping up its sex appeal with the latest commercial for the 500 Abarth hot hatch.

As for Soave, Chrysler only said in a brief statement that she has left the brand “to pursue other interests.” Her replacement, Timothy Kuniskis, left his position as Fiat and Chrysler Director of Marketing to take over the job.  Kuniskis will take over where Soave left off, continuing the rollout of Fiat dealerships nationwide and the reintroduction of the brand to North America. Kuniskis is a longtime Chrysler marketing executive who added Fiat to his responsibilities this past summer. His immediate tasks will be overseeing the launch of the hot 500 Abarth, which just debuted at the 2011 Los Angeles auto show, and the coming 500 EV.

Source: Automotive News (2) (subscription required), Chrysler

I did drive the 500 and although it is cute and does have sex appeal, I found the performances and the handling disappointing. Compare to the MINI, it looses on all performance/handling/fun to drive points.
Why not organize a Fiat 500 competition circuit throughout the U.S.? This proved very successful when they launched the NEON a few years ago.
I must agree FIAT took way to long to get the ABARTH the the U.S. market, actually they should have released it FIRST then everyone would have been buying them up thats FIATS biggest mistake an the j-lo did not help and i feel the ABARTH is underpowered for the USA. well see im still going to test drive it though!
Chrysler/Fiat has been a bit slow to introduce new models and the 500 was no exception. I was VERY interested in buying a small car and couldn't wait on the Fiat. They announced a dealership in my market, the dealer then passed on it, and now a new dealer has the franchise. That was at least a six month delay. I wasn't willing to buy a car from another dealership 60 miles away and have to rely on them for service. Sorry to the MBA's who came up with the idea, but the "Fiat Studio" is a stupid idea, It's elitist, and it costs dealers money at a time they were hurting. Should have sold them like Saturn; nice people in polo shirts, no haggle pricing, and sell lots of "apps" for the cars people can add instantly at the dealer. Change the hours to accommodate younger buyers. I could go on......
For one thing, the car was never sold here originally, so no one had a love affair with it as they did with the Beetle. For another, it still seems overpriced and impractical to me. Too small, too few doors. And, oh, yes, it's ugly as sin. I could see where it COULD be attractive, but they didn't make it attractive. Why would anyone buy it over any of the many cooler cars that exist for the same price? Fiat has a pride that only a mom could have.
There is no small car in the US that sells at 50,000 units. You can't fit a chubby round peg into a tiny square hole. They should have imported the larger Punto, and the Punto Abarth. Meanwhile, FIAT is now heavily leveraged in the US and not making money. Marchione's house of cards is falling apart.
Replacing the FIAT badge with Dodge is like making a blind man deaf. Since when did "Dodge" ever mean quality? Dodge is something you move away from quickly.
It was not Soave's fault completely. First off to set a goal at 50,000 500's was so completely unrealistic that this was set up for failure from the beginning. Mini, which started in this country with the Cooper and Cooper S and now has the Countryman and Clubman sold 33,000 through October. It was not Suave's decision to import the 500 it was Marchione's. Also let me point out that marchione has a reputation of firing people when sales do not go as planned. He has gone through about 5 or 6 manager's for Alfa Romeo in Europe. Fiat should have priced the base 500 about $500 to $1000 less, had the Abarth ready to go in April 2011. Where Suave is responsible (and this is debatible) is the slow ramp up of the dealerships. For most of the yr the dealerships numbered about 50-60 that were actually opened up, not 150. Now at the end of the yr there about 130 opened up. Next problem is Suave's,however. The marketing for this car has sucked.Having J-Lo do the ads insured that this was a chicks car. It is easier to attract chicks to a males car then vice-a-versa. What can Fiat do to remedy this situation. 1) For the existing cars drop the prices by about a grand, and have special finance programs for buyers. Stress the sporty characteristics of the 500,also by using the Abarth. For next model yr increase horspower by about 15,tighten up the suspension on all models slightly, being more aggressive on the sport. Drop the Lounge model. it is too much money. In fact I would use the Pop model as the base and offer an optional "sport package" consisting of a tuned exhaust and tighter suspension. Price the Abarth at 21 to 22 grand reasonably optioned out. Then you have a car that offers good value. If Fiat can point out that it has more room in the rear then a MIni and more trunk space for less money and similar driving experience then you bring value to it. Base price of the 500 should be $14,500. Add $750 for the sport package and $700 for leather etc. That's how you increase sales.
Marked Man
I agree with Scott Smith. This SHOULD have been the Dodge Hornet with the Abarth coming in as the Hornet SRT4. That would have been a "no brainer." People still remember "Fix It Again Tony" so most people our age would not touch it. However, you put some crosshairs on it and the use of Mopar graphics on it, it would have sold more. How much would a slight redesign would have taken. Not much compared to sales. By the way, the new compact car should be called the Dodge Dart. Just saying.....
Scott Smith
This may seem SO obvious, I hate to point it out to everyone. Why didnt Chryslier-Fiat, not just slap some instant crosshairs on the front of this little go-kart and call it the Dodge 500 and put it into an instant dealer network hungry for expanded product with a customer base that is trained to love kick in your pants fun and buy whatever the salesman tells them is amazing? They had to go and make something simple complicated. I think even me as an insurance executive with no experience in the auto industry could have delivered a better experience for these people. Geesh.
The j-lo ads were definitely way off. That seems to me to be marketing to single 35-45 year old females. That's a pretty narrow group. Why didn't they capitalize on their inherent "hipness"? Instead they detracted from this. This car should have been a way easier sell than the Smart, but they seemed to have marketed them just as bad. Very disappointing.
Soave blew it on many levels. 1. Decision to import the 500 -smallest car for the world's largest population. It should have been the Punto, or larger Alfa. 2. Jennifer Lopez ads, immediately branded the 500 as a "chick car". Kiss of Death to the auto industry, even chicks don't want chick cars. 3. The Abarth 500 -too little, too late. 4. Car is overpriced compared to competition. Too many option packages and colors.

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