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Fiat Brings New Sales Strategies To American Market


Fiat Brings New Sales Strategies To American Market

2012 Fiat 500. Photo courtesy of Fiat.

Updated March 02, 2011

Fiat is returning to the American market very soon, as evidenced by the current launch of the 2012 Fiat 500 A-segment car, which will lead the brand back into the U.S. market. With the 500 being the only 500 model sold here--for now--and with Fiat making an attempt to re-enter a market in which left under acrimonious terms three decades ago, the now-merged Chrysler/Fiat group needed to figure out a good way in which to market the new product at the dealership level

For starters, despite the fact that only one model is being sold, Fiat stores will be separate from other Chrysler brand dealers. This means that 500 buyers won't find them sharing showroom space with the Chrysler 200, although it is possible that a Fiat store could be on the same grounds as a store selling a different Chrysler brand. Whether or not they share a parking lot with Chrysler-branded stores, Fiat dealerships will stand alone.

Finding a Fiat store won't be an easy task for folks who live far from large metro areas--Fiat is counting on the subcompact 500's appeal to urban buyers, as well as the larger pool of buyers in densely populated areas--to drive showroom traffic. Even in large markets, dealerships will be scattered--the Chicago area (projected as a top five market for the brand) will only have three, for example. In total, only 37 states will have Fiat stores, with 130 set to open this year and more on the way.

Company officials say that about one-third of the stores will be built in existing buildings that belong to the dealer groups who were awarded franchises, one-third will take up residence in buildings that once sold defunct brands (like Saturn or Hummer), and one-third will be new from the ground up.

One interesting note is that only Fiat dealers will be able to service the 500. Company officials say that due to differences in the available technology, 500s can't be repaired at a Chrysler or Dodge store. That could be very bad for 500 buyers who break down in the middle of a long road trip, but very good for technicians and service advisors who work for Fiat dealers. Being the exclusive servicer of the brand virtually guarantees profits for dealership service departments.

By forcing customers to visit the local Fiat dealership for repairs, Fiat is making a bit of a gamble. When Fiat left the U.S., it did so with questions about the brand's reliability hanging over the company's head. Now, if horror stories of 500s breaking down far from Fiat stores (resulting in expensive towing bills) start hitting Internet forums, that could dredge up negative memories in consumers' minds.

On the other hand, if the car is well-built and reliable, Fiat could impress skeptical buyers who haven't forgotten the past. Of course, all this could be a moot point--with the 500 aimed at a young audience, will buyers under the age of 35 even remember Fiat's past quality problems?

Either way, the brand is hoping to strike a more positive image this time around. As Fiat's new stores open, they will feature showrooms with "clean, Italian design," as the company put it. There will be in-store cafes, and buyers who prefer to customize their rides will find Fiat offering all kinds of unique accessories, including wraps for the car's body, a la Toyota's Scion division. Fiat is promising over 500,000 different feature and color combinations among the three different trim levels (Pop, Sport, and Lounge) of the 500.

Another sign that Fiat is perhaps keenly aware of its history is the standard maintenance plan. In addition to the four-year, 50,000-mile warranty, Fiat will offer all 500 buyers a 3-year, 36,000-mile maintenance plan that covers the cost of replacing wear-and-tear items. The 500 will be built in Toluca, Mexico, and base at $15,500 (not including the $500 destination fee).

Between the unique approach to sales and service and the offering of a maintenance plan--something not often seen at this price point--Fiat is trying to re-enter the American market by shaking up the mold. For Fiat, this is probably necessary, given the brand's past. And its ideas aren't that revolutionary. For example, many dealerships, usually representing upscale brands, have cafes in their buildings.

What is unique is that Fiat isn't leaning on the rest of the Chrysler group for support, and it's keeping its dealer base small and precisely targeted, at least for now. Fiat may not be providing a blueprint for well-established manufacturers on how to run their dealer networks. But it could be a case study for other brands that are looking to enter--or re-enter--the American market. Could the Chinese be taking notes?

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