Fiat: America’s Worst Car Company of 2016

Image a car company with sales off 19% through the first 11 months of the year. Imagine a car company that routinely ranks at or near the bottom of the evaluations of Consumer Reports, J.D. Power rankings and the American Customer Satisfaction Index. Imagine a car company that routinely has 100 days of vehicle in inventory, compared to an industry average near 70. That company is Fiat, the small car division of Fiat Chrysler Automobiles N.V. (NYSE: FCAU).

Among the best measures of a car company’s success, or lack thereof, is “days to turn,” a yardstick of how long units stay in dealer inventory. Fiat’s figure was 102 days in October, against an industry average of 72. Fiat’s number has been above 100 in all but two months of the year. In June, it reached 158 days. Dealers, put simply, cannot get rid of Fiat cars.

Fiat sales dropped 19% through the first 11 months of the year to 30,136. For its base 500 model, the figures were worse. Sales of the 500 dropped 37% to 14,026. Sales of the 500L were off 59% to 3,016. Fiat was able to take advantage of the crossover rage. Its version, the 500X, had sales that rose 40% to 10,869.

[nativounit]

One of the best examples of how poorly the industry research firms rank Fiat was the most recent Consumer Reports evaluation of car brands. Fiat ranked dead last. Of a possible score of 100, Fiat rated a 52. It had no cars among the recommended models. Consumer Reports commented:

Fiat is an enormous Italian conglomerate that includes all of the Chrysler brands in its portfolio. The Fiat brand was reintroduced in the U.S. in 2011 with the diminutive, retro-styled 500. Despite attractive looks and a fun driving experience, various crudities limit its appeal. Reliability has been dismal. The 500L proved unimpressive in our tests and for the third straight year is among the least-reliable new cars in our reliability survey. The 500X is stylish and has a number of available safety features, but had a rather mediocre performance in our testing.

What Fiat has found, if its management is watching, is that reliability trumps fun every time, and years of poor reliability performance kill a brand.

[wallst_email_signup]