New Fiat to Launch July 4th, as US Sales Collapse

Among the reasons Fiat pursued ownership of Chrysler after the American car company exited bankruptcy was to reintroduce Fiat into the U.S. market. The effort has failed dismally. Fiat brand sales in America dropped 19% to 3,867 in May. For the first five months of 2015, sales have fallen 9% to 18,661. As means of comparison, Fiat Chrysler sold 18,209 Jeep Grand Cherokees in May alone.

Fiat announced the launch earlier this month:

The countdown to 4 July, the birthday of the iconic 500, has started. It is an important anniversary and this year there will be a great surprise for the millions of fans all over the world who drive it, want it or just admire it. The New 500 is coming and it will be revealed precisely on 4 July, during an unforgettable event.

Born in Turin on 4 July 1957, the 500 was revamped in 2007 and since then it has offered the public something new every year. Marketed in more than 100 countries in the world and with more than 1.5 million registered vehicles, the iconic Fiat never ceases to amaze and surprise people with its countless versions and interpretations.

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The global figures should not cheer Fiat’s U.S. executives. The only “surprise” is the inability of the American arm of Fiat Chrysler to turnaround Fiat sales.

Fiat’s problems in American are almost certainly due to its modest lineup and the fact that the 500 competes in one of the most crowded segments of the car market. The 500 comes in six versions. However, Fiat does not have any other vehicle in its product line.

The base Fiat 500 Pop sells for $16,845, has a four-cylinder engine and gets 40 mpg for highway driving. One of the best-selling cars in America, the Ford Motor Co. (NYSE: F) Fiesta, sells for $13,965 as a base price. It is configured similarly to the Fiat Pop. So is General Motors Co.’s (NYSE: GM) Chevy Sonic. All three major Japanese car companies have directly competitive products.

The 500 Pop is not the only portion of the model line that sells in a crowded part of the U.S. market. Even its electric car, the 500e, which retails for $31,800, has plenty of direct competition.

Fiat can relaunch the 500. In the United States there is no reason to think it will not be one failure added to others.

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