Fiat Sales Drop Almost Half in March, Threatening Brand’s Viability

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Fiat Chrysler Automobiles N.V.’s (NYSE: FCAU) Fiat brand posted a year-over-year drop in U.S. sales of 47% to 1,544. For the first three months, sales fell 44% to 4,014. Fiat is not a viable brand in America, and its parent will need to deal with that fact soon.

Of the four models Fiat sells, sales for three dropped by double digits last month. Sales of the flagship 500 fell 74% to 439. Sales of the 500X dropped 15% to 507. Sales of the Spider sports car fell 22% to 325. The Spider was supposed to be part of the revival of the brand. The only model that posted an increase in sales was the 500L, up 63% to 103.

Fiat has several problems. Among them is the poor quality of the brand, based on consumer surveys that include several from J.D. Power and Consumer Reports.

However, Fiat’s larger trouble is that its low-price, high fuel efficiency cars are in one of the most competitive sectors of the car industry. Fiat models have base prices from $14,995 to $24,995. The base 500 gets 31 miles per gallon (mpg) in highway driving and 38 mpg for city driving. Fiat brags the “FIAT 500 has better combined fuel economy than the Chevrolet Spark, Kia Rio and Hyundai Accent, as well as the 2016 Ford Fiesta and Volkswagen Beetle.” While that may be true, many competitors sell many times the volume that the Fiat models do.

The Nissan Sentra has a base price of $16,990 and competes directly with the 500. Nissan sold 25,123 Sentra models in March. The Honda Civic Sedan also competes with the Fiat 500 series. It has a base price of $18,840. Its city-rated mpg is 28, and it is rated at 40 mpg on the highway. Honda sold 32,584 Civic units in March.

Fiat is not only “out qualitied” by the competition, it is outgunned. Larger brands have too many models, many more dealerships, much larger marketing and larger product development war chests. Fiat does not have a chance.