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2012 Fiat 500 Sales Hit The Skids: Will It Survive?

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Many folks in the auto industry have praised Sergio Marchionne for revitalizing Chrysler. But according to a report in Automotive News, Marchionne may have made a major miscalculation about Fiat's prospects on this side of the pond. Will Fiat and its poster child, the Fiat 500, survive -- and perhaps more importantly, will Marchionne?

Once upon a time, Marchionne had predicted that sales of the Fiat 500 would ring in around 50,000 per year. Since the U.S. version of the 500 launched back in March, however, it's sold fewer than 16,000 units.

What's more, Chrysler has laid off workers at the plant that manufactures the 1.4-liter engine powering the 500 because there's not enough demand to keep those folks employed. The plant's union chairman, Tom Zimmerman, claims that 100 workers have been laid off, though Chrysler's Jodi Tinson has said that the number is closer to 30, with another 35 workers being reassigned to other areas of the facility. 

What's the real story?

In Chrysler's defense, the Fiat 500's rollout has been plagued with delays. Many of those stem from the fact that Chrysler dealers interested in selling Fiats couldn't simply add the 500 to their existing shops: Chrysler insisted that dealers create new showrooms specifically for Fiat. Even though Chrysler reported that the number of dealerships applying to sell the city car was very high, the time and cost of building out those showrooms put the process behind schedule.

Then, too, there was the marketing campaign for the Fiat 500. From the time the first 500s arrived on the lots, Chrysler worked to build awareness on social networks like Facebook and Twitter, and the company even placed a handful of ads on TV and in print. But the 500 campaign didn't hit full-throttle until just two months ago, when the now-ubiquitous commercials with Jennifer Lopez began littering the airwaves.

Those two factors alone could account for the 500's slow sales -- and why Chrysler has a 184-day supply of Fiats (both coupes and cabriolets) when the industry standard is closer to a 60-days.

Our take

The real question is: once Fiat's dealerships and marketing are up to speed, will shoppers be enticed to buy the 500?

Chrysler is doing a great job of branding the 500 with special Gucci editions, a pink-ribbon edition, and the upcoming Abarth performance edition. If that hip, stylish image takes hold with consumers, the 500 could be a huge hit -- especially with young college types on the lookout for their first rides and with downtown-dwellers in need of something easy to parallel park.

On the other hand, Americans haven't always taken small cars to their collective bosom -- and the 500 is one of the smaller rides available today. If gas prices were heading up, the public might feel differently, but for now, those prices are holding steady.

But worst of all is the fact that the young people who form a key target market for the Fiat 500 aren't so interested in cars anymore. There are a range of reasons for that -- not least of which is the crippled economy and dismal employment stats for Generation Y -- but the bottom line is that Millennials find smartphones and web-ready TVs more important than cars.

Then again, maybe this is a larger problem having to do with Fiat. After all, the company is even having troubles on its home turf, relying on Chrysler for a leg-up.

This much we know for certain: for those hoping that the return of Fiat will lead to the zippy return of Alfa Romeo, you might want to lower your expectations.

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Comments (16)
  1. At 72 years old I have a long history as a car nut...I assure you, the Fiat 500 will never attain any degree of sales that will sustain it on these shores.

    They missed having some extraordinary feature such as 50 mpg or an extremely low price...but even then, Fiat's history is not one of quality or long-lived automobiles but rather a generally troublesome product with quirks and features that become laughingstock and a good source of income for the family mechanic.

  2. A 72 Year critic that obviously doesn't have all the facts.

    4 Year / 50,000 Mile Bumper to Bumper Warranty
    3 Year / 36,000 Preventative Warranty
    3 Year / Unlimited Mileage for Roadside Assistance.

    I believe FIAT upped the ante and soon, GM and Ford will follow suit in regards to warranties.

  3. So you remember. Do you know what "FIAT" stands for?
    Fix It Again Tony

  4. I don't buy all the hype surrounding the Fiat 500. Maybe as a second car for short commutes, but as a small family car? No way. The market is flooded with better and cheaper. I feel the "Mad Men" are way off base on their marketing. The day the beautiful and/or talented Jennifer Lopez steps out of a Fiat 500 for anything other than a commercial shoot will be the day that the global economy has frozen over. The last thing on the minds of the "99%" will be spending money on an iconic Italian automobile. The Chrysler/Fiat merger is merely stalling the death march for both entities.

  5. what's better and cheaper? People keep saying that crap but never back it up with any options.

    As far as I'm concerned, it's as good as any other car in it's price range and it has more style and fun're simply going by size...a typical narrow-minded American point of view.

  6. Who ever called it a 'family car'?

  7. It's just simply too expensive for what you get. Comparably equipped Hyundai's and Kia's come in well under the inflated sticker on the Fiat. It's a great little car with a poor price point.

  8. No they are not...a fully loaded Hyundai or Kia costs as much if not rubbish.

  9. As a nearly 78 yr old car non-nut Ive seen it takes TIME to see trends. I've had Chevys, Nash, Studebaker, MGA(&B), Buicks, Olds, Datsun & even a FIAT 124. Gas prices & success of hybrids will probably have a large influence. YES, it's overpriced (especially compared to the new Nissan Versa @around $11k), but since there ARE those willing to spend $40k+ on a Volt anything can happen. STAY TUNED- many predictions have been shown to be completely wrong !

  10. Tons of cars are better and cheaper. First of all, the 500 is one of the slowest cars in the market. Cars that are better are the Honda Fit, Mazda2 and 3, Hyundai Accent, and a few more.

  11. First of all, I don't know many people who buy two door coupes anymore. My son who is 19 is waiting for the new Dodge Dart which is a four-door sedan. The guy across the street got rid of his Mini Cooper for a new Ford Fusion and the Mini wasn't six months old.

  12. why would anyone even consider a car this ugly?? maybe aztek owners need a newer car. The turbo beetle,supercharged mini is faster,you have the mazda 3,the new RWD orrerings from subaru and toyota/scion coming. This piece of junk is doomed from the beginning. Trying to hype up a 9k car into a 17-20k car just because it`s Italian is a joke

  13. The Fiat 500 was selling at a rate of about 3,000 units a month during its introduction. Since then sales have really taken a dive, from 2,750 units sold in September 2011, then 1,965 sold in October 2011, and at last count, 1,610 sold in November 2011. Final December 2011 are not in but preliminary reports put it at around 1250. Trackable year-to-date sales is a disappointing 17,450.

    Initially the 500 received many awards and accolades, unfortunately, they were way premature and these poor sales figures have even cost Fiat NA, Laura Soave, her job. The bigger question might now be how long her successor, Tim (Fix It Again Tim) Kuniskis, will be at the helm of this sinking ship. Jennifer Lopez will have to be naked in these Fiat commercial

  14. ... in these Fiat commercials in order to drum up new customers. Arrivederci, Sergio.""Fiat was only able to muster 19,769 vehicles in 2011. Marchionne dismissed Fiat’s failure as a “rounding error”..."" OOPS! Maybe more Catrinel Menghia will help... NOT!

  15. I just ordered a 500 Abarth,and can't wait to drive it.The dealer is a bit slow in getting the car because of the demand.But I will wait until when ever it comes.NO VW or MINI for me.

  16. While the 500 is an initially appealing small car, the gas mileage and overall power are pretty weak aside other competitors. I considered one, but the Ford Focus five door won out after consideration of available tech features and fuel efficiency.

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