When Village Motors in Los Angeles opens the first “Fiat Studio” this month, it will be the first of 130 such showrooms that will open by the end of the year to sell the Fiat 500. This small, four-passenger hatchback is part of Fiat’s plan to combine itself with Chrysler, and re-enter the U.S. market. The Italian automaker controls Chrysler through its 20% stake, and has set its sights on becoming a bigger global automotive player.
Many are bullish on the return on Fiat to the U.S. after a 27-year absence, this despite the recent closure of such automotive brands as Mercury, Pontiac, Saturn and Hummer. AutoNation, the biggest auto retailer in the world, will be opening seven of the Fiat dealerships.
Indeed, the 500, a diminutive model that will compete with the Mini Cooper, as well as cheaper compact models like the Toyota Yaris and Hyundai Accent, should appeal especially to car buyers who lean toward making buying decisions based on design and fashion. The 500 is more cute than anything else, with plastic body-color appliques on the dashboard to give the interior a fun atmosphere.
The 500 conjures up images of ‘60s era cars like the original Fiat 500 or Volkswagen Beetle, which had metal dashboards the same color as the exterior. Its 1.4-liter engine performs better mated to a manual transmission, but the automatic is not a dog by any means. Offering 30 mpg city/38 mpg on the highway, its fuel economy numbers are a bit low for a car this small, but they’re not uncompetitive.
The relaunch of Fiat here is tied up with the company’s venture to expand its alliance with Chrysler, which the Italian automaker took control of in 2009 when Chrysler went through bankruptcy. The White House Auto Industry Task Force deemed Fiat’s control, and its 20-percent ownership, as the best option for Chrysler’s salvation. The two companies, led by CEO Sergio Marchionne, are now developing Chryslers, Fiats, Alfa Romeos and Lancias using shared engineering platforms and engines.
A series of Chryslers, for example, will be engineered off a modified vehicle platform that currently serves as the underpinnings of Fiat’s Alfa-Romeo Giulietta. The plan also calls for the introduction of Alfa-Romeo vehicles to the new Fiat dealerships in the U.S. Dealers are expected to get the first of the U.S.-bound Alfas starting next year: A mid-sized Giulia, the MiTo compact hatchback and iconic Spyder roadster. Fiat has taken over the distribution of Jeep in Europe, selling the off-roaders at Fiat stores, and a new Jeep is being developed off a Fiat platform.
Fiat is also taking the new Chrysler 300 and Dodge Journey and will sell those vehicles in Europe as Lancias, though with interiors that better match Italian tastes, more sumptuous and leather-bound. “These cars are beautifully done, and we believe there is a market in Europe for them,” says Chrysler marketing chief Olivier Francois, who is also CEO of the Chrysler brand in North America and CEO of Lancia. “There is very little financial risk to try even if it doesn’t work.”
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