Sales of the Fiat brand of Fiat Chrysler Automobiles N.V. (NYSE: FCAU) dropped to 27 units a month, a remarkably small number for a globally recognized brand. The figure shows how badly a maker of small, high-mileage sedans can do in an American market now dominated by sport utility vehicles, crossovers and pickup sales.
The first Fiat was built in 1889, making it one of the oldest car brands in the world. It is also one of the largest manufacturers in Europe. It sells its models across the globe. However, the ability of its parent to transplant the brand to the United States has not worked at all.
In March, Fiat sold only 847 cars in America, down 45% from the same month a year ago. Sales for the first quarter were 2,214, also down 45% year over year. All four Fiat models suffered double-digit losses in sales last month. Sales of the flagship 500 dropped 29% to 310. Sales of the 500L fell 65% to 61. Sales of the 500X dropped 57% to 262. Sales of the Spider sports coupe were down 34% to 214. Fiat was highlighted recently on a list of cars Americans don’t want to buy.
Fiat faces two hurdles to U.S. sales that are probably insurmountable. The first is that its small cars compete with models made and marketed by almost every major car company that operates in America. A good example is the competition the Fiat 500 has. The 2018 model has a base price of $16,495. It has a tiny 1.7-liter engine, which has only 135 horsepower. The model sits squarely in the high-mileage small car range. It gets 28 miles per gallon in city driving and 33 mpg in highway driving.
As an example of the stiff competition, Ford sells its Fiesta for $14,260. It has features very similar to those of the Fiat 500. Chevy markets the Spark for $13.220, and it also has features like the 500. The Toyota Yaris, priced at $15,635 is another car in this category. These models from the three top-selling brands in the United States are only a partial list of those Fiat is up against. And each of these brands has more dealers and much larger marketing budgets than Fiat has.
Fiat’s second hurdle is that it has among the worst quality reputations of any brand in America. It ranked last among 31 brands in the recent J.D. Power 2019 U.S. Vehicle Dependability Study. It holds the same spot in other J.D. Power surveys. It also has received abysmal scores in Consumer Reports tests. The brand ranked fifth from the bottom among the 31 brands covered in the American Customer Satisfaction Index 2018 Automobile Report.
The challenges Fiat faces in America are almost impossible to overcome. Other major brands are cutting back car models as U.S. consumers turn away from sedans and coupes. And, based on the competition and perception of its cars, Fiat does not have a way to dig out from under its problems.