The data on sales and product quality just keep getting worse for the Fiat brand of Fiat Chrysler Automobiles N.V. (NYSE: FCAU). It is a wonder the parent company even keeps Fiat models on the market at all, at least in America.
In the widely followed and widely regarded J.D. Power 2017 U.S. Initial Quality Study, Fiat ranked dead last, behind 32 other major car brands. The measure was based on problems per 100 vehicles. The industry average was 97. Fiat’s figure was 163, well more any other brand on the list.
This is not Fiat’s first brush with poor grades from J.D. Power. It has fallen at or near the bottom of several of the research firm’s auto studies in the past several years. At the same time, Fiat has struggled with U.S. sales.
From January through May, Fiat sales fell 14% to 12,440. In May they fell 14% to 2,670. In other words, Fiat only sold 90 cars per day in May. It is often the car that dealers have to hold the longest after receiving units from the factory.
Fiat Chrysler will need to make a decision about whether to keep the brand in America, if sales continue to fall and quality remains a major problem. It is a niche brand, at best. Marketing Fiat in the United States costs tens of millions of dollars a year. And, most important, it is an embarrassment to the parent company.
Initial quality in this iconic study was measured by the number of problems experienced per 100 vehicles during the first 90 days of ownership, with a lower score reflecting higher quality. In this year’s study, quality improved across seven of the eight categories measured, with 27 of the 33 brands in the study improving their quality compared with 2016.