Fiat Chrysler Automobiles N.V. (NYSE: FCAU) is in talks to merge with Renault to create the third largest car company. The new firm would have some of the world’s most popular brands. It also would have some headaches. Among them is that the Fiat brand sold only 33 cars a day in the United States in May.
Fiat’s U.S. sales have suffered for several years. The May numbers showed sales for the month at 1,025, down 34% from May of last year.
For the first five months of the year, Fiat sales in the United States fell 39% to 4,170. Each of the Fiat models has experienced a fall-off of sales this year. These include the 500, 500L, 500X and Spider sports car. 500L and 500X sales are off over 50% for the five-month period. Some Fiat models are even on our list of cars Americans don’t want to buy.
There are several reasons for Fiat’s American problem. It sells small, inexpensive, high gas mileage cars. Unfortunately, every other large manufacturer, from Ford to Toyota to Nissan to Hyundai, does as well. The 500 has a base price of $16,495 and a tiny 1.4-meter engine. It is a good, small car for city driving.
Unfortunately for Fiat, the tastes of American drivers no longer tend toward sedan or coupe ownership. There has been an explosion in the sales of crossovers, sport utility vehicles and pickups. That has damaged car sales. Ford has gone so far as to eliminate most of the cars it sells in the United States.
Finally, Fiat as a quality control problem. Its cars have done poorly in tests by Consumer Reports and J.D. Power. Quality of ride and amount of space for passengers and cargo are among the troubles. J.D. Power has put Fiat at the bottom of its list of cars ranked on dependability.