Italian Flair Not Enough to Sell Fiat People-Mover in U.S.

DETROIT – Chrysler is taking a more calculated approach to its U.S. introduction of a Fiat people-mover than the auto maker did with the Fiat 500 rollout, CEO Sergio Marchionne says.

Before the B-segment vehicle’s U.S. arrival, which Marchionne would like to see this year, expect the Fiat dealer network to be better prepared and supported by more marketing muscle.

First-year North American 500 sales fell some 24,000 units short of its target of 50,000.

“We thought we were going to show up and just because of the fact people like gelato and pasta, people would buy,” Marchionne says at the Automotive News World Congress here.

But Marchionne, who also heads Italy-based Fiat, takes full responsibility, although the misfire also cost Laura Soave her job as the brand’s top executive in North America.

“Blame me,” he says. “The 50,000 number is a number that was thrown out. And I did it.”

For the people-mover, Marchionne promises to stay grounded. “You need to be realistic about what the volume expectations are in the U.S. I made a mistake (with the 500) by assuming that we could walk in the first year (and outsell) Mini. You need to walk before you run.”

U.S.-market Mini sales in 2011 plunged 10.6% compared with prior-year, WardsAuto data shows. But its 40,828 deliveries still were more than double the 500’s unit total.

The B-segment Fiat people-mover will make its debut in March at the Geneva auto show. In overseas markets, the vehicle, codenamed “L0,” will replace the Fiat Multipla and Idea.

U.S. rollout timing is contingent on progress at the assembly site, a Fiat-owned plant in Sumadija, Serbia, Marchionne says.

Known as Zastava, the plant is the former production site of the much-maligned Yugo. Fiat has invested heavily in the site, overhauling it to accommodate people-mover output.

Also new this year in U.S. Fiat showrooms will be an Abarth-branded high-performance iteration of the 500 and an all-electric 500. They are due in the first and fourth quarters, respectively.

Tim Kuniskis, who succeeded Soave in November, says he is focused on further developing the dealer network, raising brand awareness and ensuring dealers become “proficient at capitalizing on the awareness that we’re building.”

Fiat has 137 dealer “studios” in the U.S., Kuniskis tells WardsAuto on the sidelines of the North American International Auto Show this week. “But expect that total to grow in number and in scope.

“We have some deals in progress right now,” he says. “But we have holes around the country. We have whole states where we don’t have a single studio.”

That is problematic because new markets are emerging.

“When we originally looked at the (500), we looked at the metro markets where A- and B-segment cars were sold,” Kuniskis says. “What we’re finding now, with eight or nine months of sales under our belt, is the car is appealing to other customers.”

Instead of primarily drawing young professionals, as expected, “we’re getting trade-ins across the board. Our No.1 segment trade-in is midsize car.”

On a brand basis, many customers are coming from Toyota and Honda, Kuniskis says. “So what we’re telling dealers is, don’t look at a demographic; look at a psychographic. Look at a person who is looking for something different.”

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