Fiat's U.S. dealers anxious for broader product lineup
By Bernie Woodall
DETROIT (Reuters) - A meeting of U.S. Fiat dealers to discuss future products, including the arrival of Alfa Romeo models, has twice been postponed and no new date has been set, several Fiat dealers said this week.
Some of the 204 U.S. Fiat dealers are struggling to turn a profit selling several versions of the Fiat 500 subcompact and some dealers said they anxiously await more details from Chrysler and its Italian parent, Fiat SpA FIA.MI, on plans to expand products beyond what has been already announced.
Fiat returned to the U.S. market in March 2011 with 40 dealers after a 16-year absence selling a single product, the two-door Fiat 500, largely known outside North America as the Cinquecento.
The Italian carmaker, led by hard-charging Chief Executive Officer Sergio Marchionne, took over management of Chrysler after the No. 3 U.S. automaker's 2009 bankruptcy, partly on the promise it would make the company less reliant on gas-guzzling pickup trucks and SUVs.
The Fiat brand's return to the United States was not part of the bankruptcy deal. Fiat the corporate parent owns 61.5 percent of Chrysler and Marchionne hopes to buy the remaining shares and merge the two companies.
Gary Brown is the new chairman of the Chrysler Dealer Council. He owns a Fiat dealership on Long Island in New York, which sits 60 feet from his primary store, which sells the higher volume Chrysler, Jeep, Dodge and Ram Truck brands.
Brown says he has full faith that Marchionne and his executives will make Fiat dealers successful in the long run, but he is among those having a hard time selling only one style of car.
"I'm struggling to break even," said Brown. "With the one car in a small (volume) segment, it's a tough go right now."
Brown said he is counting on the launch of the longer, four-door 500L this summer, which is expected to arrive at showrooms in June or July. A limited edition of a two-seat sports car called the 4C will be the first Alfa Romeo to hit the U.S. market late this year or in early 2014, but a higher-volume Alfa car is not expected until 2014.
"The real key is rolling out new product, additional offerings," said Brown. "The four-door (500L) is really going to be a shot in the arm. It will put a franchise on more people's radar as they are shopping for a small car."
Brown and several other Fiat dealers said Chrysler officials did not inform them why a Fiat dealer meeting to be held at Chrysler's headquarters in Auburn Hills, Michigan, on April 20 was postponed to May 20 only to have that one postponed as well.
One dealer who wished to remain anonymous assumes there is another delay in the schedule to bring Fiat's sporty lineup from Alfa Romeo to the United States.
A Fiat spokesman declined to comment on the meetings, saying they are internal matters between the company and its dealers. He pointed to plans to introduce the bigger, four-door 500L this summer and for the first Alfa Romeo, a limited-edition two-seat sports car, the 4C, to arrive late this year or early 2014.
Tom Libby, lead analyst for Polk's North American forecasting, said that initially, the Alfa Romeo Giulietta hatchback was to get to the U.S. market in April 2010. That has been pushed back several times to April 2014, he said.
And the larger sedan, the Giulia, is now expected to arrive in June 2015, Libby said.
Chrysler and Fiat officials declined to comment on the arrival dates for the Giulietta and the Giulia.
QUICKER TO 40,000
In 2012, Fiat sold 43,772 500s in the United States.
Through April this year, Fiat's U.S. sales were up 6 percent to 13,511, in line with the growth of the domestic new vehicle market.
While sales are still relatively slight for Fiat, it made it to 40,000 annual sales in its second full year in the U.S. market.
By comparison, BMW AG's (BMWG.DE: Quote) Mini subcompact took four years to reach that level after it was introduced in 2002, according to TrueCar.com.
The lineup of Kia Motors Corp (000270.KS: Quote) also passed 40,000 in sales in its fourth year in the United States, according to KBB.com.
Three analysts, Libby, Alec Gutierrez of KBB and Kristen Andersson of TrueCar each said they think Fiat will be successful in the U.S. market and dealers who are not turning a profit now will be once the product lineup broadens.
"I'm more optimistic than I was about year ago" about Fiat's U.S. success, said Libby.
The brand will gain as more Americans turn to smaller cars that are more fuel-efficient. The subcompact segment is growing, he added.
(Additional reporting by Jennifer Clark in Milan and Andre Grenon)
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