Car and Driver: By Executive Fiat: FCA Outlines Plan to Streamline Dealerships and Options

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Fiat’s best sales year in the US was 2014, when it sold 46,121 vehicles. Since then despite the introduction of the 500X and the admittedly low-volume Alfa Romeo 4C and 4C Spider, the numbers have been declining. FCA North America Passenger Car Brands supremo Tim Kuniskis admits as much, noting to Automotive News of the 500X and 500L, “We’re not getting any new people in, and all we’re doing is flip-flopping them between these cars.” The solution? A streamlining of option packages to provide differentiation among models, as well as a significant revision to the brand’s dealer strategy, namely, Fiat franchises can now be rolled into other FCA dealerships, a move that FCA says could save a dealer selling 180 Fiats a year $180,000 annually.

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The 2014 Fiat 500L Custom SEMA Show concept.

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Note that the dealership-revision portion of the plan stops short of a mandate. Dealers are free to maintain their standalone Fiat stores, and with the arrival of more product in the form of a mainstream Alfa and the Miata-derived 124 Spider, there may be a case among shops that carry both the Fiat and Alfa Romeo lines for maintaining a distinction. But Kuniskis’ plan allows for savings by eliminating dealer costs for a separate corporation, streamlining ordering and advertising payments, as well as eliminating dealer-management services and online-listing service payment redundancies. Of Fiat’s 206 showrooms, 164 have sister Chrysler-Jeep-Dodge-Ram dealerships, making the plan of significant interest to a large portion of the dealer body.

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For the 42 Fiat dealerships that aren’t affiliated with another FCA shop, the corporate parent will work case-by-case deals designed to ease the financial strain, including monthly rent-assistance payments.

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The 2016 Fiat 500X.

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On the product side, while all options will remain available, they’ll now be sorted into packages. For example, the Fiat 500, which is currently available in nine trim levels each with its own option packages, will be reduced to three trim levels, with option packages making up for the rest of the differentiation. Above the 500, the 500X and 500L will see more pricing differentiation in an attempt to keep the pair from cannibalizing each other.

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What effect might all this have on the Fiat brand? Given stagnant-to-sliding sales, it seems as if the current mindset of the Fiat intender is relatively fixed. With the front-drive Dodge Dart and Chrysler 200 likely headed the way of the dodo unless another company takes over production, the Fiat line offers small-passenger-vehicle substitutions for those who might walk into a full-line FCA dealer but would rather not roll out in a 300 or Charger. In short, it’s an admission that the original American Fiat relaunch strategy has largely been failure. The question now is whether this rethink can at least turn the brand into what might amount to a qualified success.

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