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Dealers have taken 1000 orders for Abarth which doesnrsquot go on sale for a few more days
<p> <strong>Dealers have taken 1,000 orders for Abarth, which doesn&rsquo;t go on sale for a few more days.</strong></p>

Fiat Looks to Boost Output of Abarth as Brand Builds Momentum

The auto maker posted record sales in February and March and expects to do so again in May, after it fills the pipeline for the diminutive 500 model.

CHICAGO – “A small, affordable car doesn't have to be a commodity,” Tim Kuniskis, head of the Fiat brand in North America, notes in unveiling the new Abarth performance version of the Fiat 500 to the Midwest Automotive Media Assn. here.

Though the car doesn't go on sale for a few more days, Kuniskis says dealers already have taken 1,000 orders and Fiat is making plans to increase output because supplies are expected to be tight.

While Fiat had to put up with media reports of failing to live up to expectations when the 500 debuted last year, Kuniskis says the nameplate is building momentum, with deliveries increasing in December and throughout the first quarter of this year.

“We had record sales in February and then record sales in March and expect to have record sales in May,” he tells MAMA. “Why not a record for April? Because we're running a little short of cars and need to rebuild inventory, which we'll do in May.”

Another problem is a limited number of dealerships – only 124, Kuniskis says, though that's still slightly more than the 110 dealers for rival Mini.

“We don't have dealers in 11 states yet, and that's costing us money,” he says. “Some people have expressed interest in the car, but the nearest dealer is 500 miles (800 km) away. We don't have a dealer yet in Boston, Chicago, Santa Monica (CA) or San Francisco, and are just getting a dealer in Miami.

“We put seat counters in our cars at the Chicago auto show and 130,000 people sat in the Fiat 500 in the front of our exhibit, more than sat in a Jeep Wrangler,” Kuniskis adds, suggesting there is a great deal of interest in the model but not enough dealers with cars to satisfy potential demand.

Still, he insists, “We aren't going to share showrooms and sell Fiats out of Dodge stores,” a reference to the fact Chrysler and Fiat are using the same engines and vehicle platforms but have no intention to share retail space.

But Fiat does intend to expand the brand. It will add a battery-powered 500 in early 2013 to counter gas-price spikes and cater to those who demand energy conservation. The auto maker also will offer a longer, wider 4-door L sedan in summer 2013 for buyers who want more room for passengers and possessions.

Both models will be unveiled at the Los Angeles auto show later this year, Kuniskis says.

“Mini has six models, and we have the 500 coupe and convertible and now the Abarth and (we) need to grow our product portfolio and look at bigger variants. The first of those will be the L sedan,” he says.

Buyer demographics have been difficult to pin down.

“It ranges from Gen X to Baby Boomers, from those who earn $50,000 annually to those who earn $150,000,” Kuniskis says. “Forty percent of trade-ins are small and midsize sedans and 25% of all trade-ins are Honda and Toyota cars, which means Fiat is conquesting sales.”

One reason for Fiat's growth is that awareness has grown sharply, thanks to advertising that has proved more successful than expected.

Kuniskis says five years ago, awareness of the Fiat brand was only 8% among U.S. consumers. That rose to just 9% six months after the 500 made its market debut.

“It just so happened that Jennifer Lopez contacted us and said she'd like to drive our car in a music video she was going to do,” he says of the singer and actress. “We said, ‘Sure, but we'd like to use some of the video as a commercial.’

“Like her or hate her, everyone knows who she is, and within 60 days of the commercial, Fiat awareness rose to 30%. It took six months to go from 8% to 9%, but only 60 days to go from 9% to 30%.”

Fiat was concerned about running the Lopez ads for too long and having “a car with a flower-vase situation on our hands,” Kuniskis says in a reference to the bud vase on the dash of every last-generation Volkswagen Beetle sold. That made consumers associate the Beetle with a “woman's car,” turning off some male buyers.

“But then we did our Super Bowl ad (a young man admiring a beautiful young woman/Fiat) and our ‘Charlie Sheen gone wild’ ads and awareness of Fiat rose to 45%. And while 72% of all Fiats in Europe are owned by women, 65% of all Fiats in the U.S. are owned by men.”

The mix is expected to settle eventually to a little more than 50% male, he says, as the electric variant and extended-length 4-door sedan arrive.

Prior to the Italian auto maker's reentry into the U.S., much was said about whether Fiat could survive in a market abandoned years ago amid a reputation for poor durability, reliability and quality.

“There's good and bad news about that negative feeling,” Kuniskis says. “The bad news is that as a result of those negative feelings, it cost us a lot of time and money to make people aware of us. But the good news is that since only 8% of the people were aware of us initially, only 8% might have had a negative view.”

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