Opening the door once again to asking why Fiat Chrysler Automobiles N.V. (NYSE: FCAU) continues to sell the Fiat brand in the United States, its November sales fell 28% to 1,733. For the first 11 months of the year, they are down 18% to 24,754. One would think the parent company would have better things to do with its product development and marketing investments.
If it had not been for an uptick in sales of the 500L, the numbers would have been worse. Sales of the 500 and 500X each dropped more than 30%. Sales of the new Spider sports car dropped 23% to 268. While the new model’s sales are up 88% for the year to 4,191, the number is misleading since the car was available for only part of 2016.
Fiat has faced the headwind of bad reviews for the brand and its dealers. However, this may not be its most serious problem. It faces competition from low-price, light, high-mileage cars made by every other manufacturer of any size. The base price of its line is between $15,000 and $25,000. Ford’s Fiesta and Focus are both competition. So are Toyota’s Yaris and Corolla, the Honda Civic, and Nissan’s Sentra. Civic sales run about 30,000 a month, Corolla sales about 25,000 and Sentra about 20,000.
Fiat has started to offer 0% APR financing for 72 months for the 500X. That wouldn’t be nearly enough to take Fiat out of its tailspin. The U.S. lifetime of the brand has run its course.