Most successful car brands sell hundreds of vehicles a day. The best-selling vehicle in the country, the Ford F-150, sells over 2,000. At the bottom of the sales list of well-known car brands, Fiat sold only 25 cars per day in 2019, which raises the question of whether it will be able to stay in the United States at all.
Fiat is a brand owned by Fiat Chrysler Automobiles N.V. (NYSE: FCAU), which also owns Jeep, Chrysler, Dodge and Ram in America. In total, the parent company sold 2,203,663 vehicles in 2019, down 1% from the previous year. Of those, about 40% were Jeeps and 32% were Ram pickups and other trucks. The numbers show how pickups, sport utility vehicles and crossovers have come to dominate the U.S. market. Sedan and coupe sales for most brands across all the major manufacturers have dropped. This is part of Fiat’s problem.
Its challenges, however, go well beyond the decline in traditional car sales. Fiat sold just 9,200 cars last year, which is what more successful brands sell in a month. Fiat’s total sales for the year were down 41% in 2019, compared to the year before, a sign of how quickly the fate of the brand is weakening. The trouble is not just for its parent. Dealers must be upset as well.
Among Fiat’s problems is that its cars are sold in one of the most competitive parts of the market. Most of its sales are for its 500 nameplate. These cars are light, cheap and get good gas mileage. The base price of the least expensive Fiat 500 is $16,495. It gets 28 miles per gallon of gasoline in city driving and 33 on the highway.
Almost every major manufacturer has vehicles that compete with the 500. Among the best selling of these are the Ford Fiesta and Toyota Yaris. Ford and Toyota have almost universally known brands, large dealer networks and huge marketing budgets.
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Another challenge that Fiat has, and one it almost certainly will not overcome, is its terrible reputation for quality. It routinely sits at the bottom of the rankings from J.D. Power and Consumer Reports, probably the two most widely read measures of car quality. It is nearly impossible for Fiat to convince buyers that they should not purchase a better-rated brand. Fiat has become one of the cars Americans don’t want to buy.
To support any car brand, its parent has to make a huge investment in product development, engineering, marketing and dealer support. At Fiat’s sales level, it is hard to see how Fiat Chrysler can do that anymore in the United States.
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