Will Americans embrace Chrysler's Fiat cars?

Posted by: David Welch on June 10, 2009

fiat-500-display-frankfurt.jpg


Here’s a question to ponder as Fiat takes control of Chrysler. Will Americans buy cars engineered by Italians for Europeans? History says no. For years, General Motors brought over the occasional Opel and tried to sell it as a Saturn or a Cadillac or whatever. The Saturn L-series was an Opel Vectra. The Cadillac Catera, or Caterrible, was an Opel Omega. Both failed.

In each case they encountered the same problem. Thanks to higher fuel prices, Europeans pay more for passenger cars. So when U.S. carmakers brought their Eurocars here, they often stripped them down to reduce costs and still make a profit at the lower prices Americans would pay. GM’s imported Opels often got weaker suspensions or the interior appointments weren’t as nice. The cars were watered down. Ford had a similar problem with the Ford Contour and Mercury Mystique, nicknamed the mistake. Ford kept the nice features and gave the cars the same nimble handling as the European Mondeo. But Americans didn’t want to pay up for a car smaller than a Taurus. It flopped.

Even Volkswagen—with its pricey family sedans and compacts—has never gotten big sales numbers in the U.S. The cars are too expensive to penetrate the mainstream, quality lags the Japanese and American models and the euro-to-dollar exchange rate has been killing them. Then you have failure in the U.S. by Fiat and Renault. In other words, Europeans have not been able to break the interloper’s curse when it comes to mainstream cars. In luxury, it must be said, BMW and Mercedes are kingpins.

In fairness to Fiat, a lot of the examples mentioned here were simply bad automobiles or wretched management decisions. Fiat plans to build cars here in Chrysler plants, which means competitive labor costs, lower shipping rates and no currency exchange risk. The business case looks much better. Also, the Italians know styling. The Fiat 500, pictured above, and the Alfa Romeo cars are quite catchy.

But to succeed, Fiat will have to adjust those cars to meet American tastes. European passenger cars tend to be engineered smaller to fit in tight European parking spaces and city streets. Americans like roomy rides. Fiat’s quality is barely average in Europe. They will have to step that up to compete with the likes of Toyota, Honda, Ford and, yes, GM. And when they come here in about two years, there may be even more competition from India, China, another European player or whoever Roger Penske can contract to make new Saturn cars. Fiat also has to improve Chrysler’s home-grown models, none of which get a friendly nod from Consumer Reports despite the supposed overhaul that outgoing CEO Robert Nardelli gave them. Fiat CEO Sergio Marchionne is a fix-it man. But he has a lot of fixing to do. His Chrysler play has hope, but it’s far from over, folks.

Reader Comments

Paul (Vw)

June 10, 2009 8:43 PM

>>> Even Volkswagen—with its pricey family sedans and compacts—has never gotten big sales numbers in the U.S. The cars are too expensive to penetrate the mainstream, quality lags the Japanese and American models...

I couldn't agree more...

I used to buy only American. Now my last few cars have been an Audi A4/VW Passat Wagon/Beetle convertible. What is wrong with me?

PAUL

June 10, 2009 9:55 PM

Chrysler should of died. Now it lingers on. My prediction- sales fall even more, fiat uses the chrysler dealer network to distribute its own line up of fiats and alphas, and maybe jeep and dodge will survive thanks to their suvs and trucks.

Snoz

June 11, 2009 3:30 AM

Italy, the only European country to have elected 50 governments since WWII. Showing their rare unity and respect for government, Italians elected to its parliament an infamous hooker who subsequently flashed fellow members during session as her unique form of debate. On the less humorous side, the Italian Mafia operates a monopoly of trash hauling business in Naples and Milan with predictable results. With those kind of legends, what can the Italian do with Chrysler that American can not? BW readers know what the acronym FIAT stands for. Thirty years ago in a less competitive auto market, Americans gave Fiat the boot and never looked back. Today, Fiat wants to re-establish a beach head in the highly competitive American auto market using a Fiat masqueraded as a Chrysler. No need to call out the battle-harden Samurai Toyota or Honda. The apprentice Korean Kia and Hyundai are more than enough to slaughter Fiat.

Mario Maverick

June 11, 2009 9:27 AM

I think some Americans will definitely be interested in buying FIATs in the states including myself. We have accepted all makes from all over the world and as a result entertain foreign choices and takes on design and assembly. FIAT would add to the mix and bring some fresh new faces on the streets and highways of the US.

Lately, most Japanese designs are boring - see Toyota, German like - see Nissan, Hyundai - copy cat designer city and avant garde risqué - see Honda (kudos for their daring styling.) FIAT has an opportunity to add to the mix - Italian designers and studios are contracted by many car companies for design so they do know about design and packaging as well.

Quality can not take second place and FIAT has to nail it - they don't want their old American FIAT acronym to come back again - Fix It Again Tony.

We love the Jeep brand and trucks from Chrysler and it would be a waste to see them fade away. Best of luck to you Marchionne - thanks for saving US jobs and Chrysler.

MAtthew

June 11, 2009 9:53 AM

My Parents have been to Europe and have driven Fiats and love them, I have been on the Fiat showroom website and love the look of some them and would buy if available in the US.

Aaron

June 11, 2009 11:38 AM

If Fiat can keep the prices reasonable - unlike GM and it's $40k VOLT, then yes, I sure would be interested.

MacGuffin

June 11, 2009 1:53 PM

This is really the core of the Chrysler problem. No one really knows if these Fiat products will be accepted by American consumers, especially in volume.

History says no. After decades of neglect, I'm not convinced that the dealers have the savvy to sell anything but rental car quality vehicles.

Bruce

June 11, 2009 4:24 PM

I drove a FIAT 128 plastered with yellow lemons back in the 70's. I've bought Dodges ever since. The memories of that FIAT make me think the next car will NOT be a Chrysler/FIAT.

Robmac

June 11, 2009 7:08 PM

A very strange article considering that most new Ford cars are European based not to mention Mercedes, BMW, Jag, VW, Audi and the list goes on. Americans seem to have a taste for European cars Chrysler Fiat looks like the prefect pair European cars and American Trucks, vans, Jeeps and SUV's.

GEORGE

June 11, 2009 8:21 PM

It,s a shame some of you Yanks were a bit more patiotic,then perhaps your auto industry would not be in the crap.If you ever go to UK,Europe you will see far more European autos on the road than Japanese cars.Having rented many cars while visiting UK and Europe ,I can tell you there is nothing wrong with Fiat,Renault or any of the European cars.Great gas mileage and performance and quality.Strangely the only cars I had any problems with as far as quality goes was a Nissan where the plastic around the guages dash were coming apart with only 4000 mls on the clock.

umair

June 12, 2009 1:44 AM

Chrysler fiats small and beautiful design im searching some automobile sales on the net like cars lease and now im searching the businessweek there are the lot of variety related to auto cars.

MKA

June 12, 2009 2:16 AM

Jeremy Clarkson likes the little Fiat 500 "Quite a lot" so the argument about it not being big enough for a 6' plus person isn't there. Still, combining Fiat and Chrysler together is going to be an uphill fight me thinks. This could be the next winning thesis for a PhD someday soon...

Bill

June 12, 2009 10:43 AM

Fiat was run out of this country years ago because of poor reliability and poor dealer service. It would seem unlikely that they are now a completely different company. I guess we will find out soon enough.

Baba

June 12, 2009 12:45 PM

George,
I owned a GM product and a chrysler product and both of them gave me nothing but grief. My Hondas (knock on wood) run like clockwork. BTW, Mechanics like working on Hondas and Toyotas and better yet I know many mechanics that drive Hondas and Toyota.

Why do I need to go back to GM, Ford or Chrysler now?

I am happy with my OHIO built CR-V and there is no compelling reason for me to switch.

The Big 3 got greedy by taking out quality and focusing on high margin trucks so they can pocket more $$$

Car Fan

June 12, 2009 12:47 PM

At first I was a bit skeptical about the FIAT take over too, but it is starting to look like a good deal the more I think about it. Chrysler was known as an innovative and nimble company prior to the Daimler merger which meshes well with FIAT (Daimler was a horrible match in that regard). They offer vehicles that do not overlap and FIAT has excellent engine and manufacturing technology. So long as the quality is average, I think they'll find their customers and provide good competition in the market. Using only the very old experience with FIAT from the 80's and 70's as an indicator is fairly useless. Anyone remember Korean manufacurers from that era? At least the FIATS were fun and interesting back then :)

ps

June 12, 2009 4:41 PM

FIAT is no more Fix It Again Tony. Their cars are world class. Why was it GM and Ford could build absolutely great cars in Europe- styled nice, great handling, tight fit and finish while marketing pushrod V-8s and 4 speed trannies here? At least they've come up the curve a little late. I think FIAT can cut it here with their new models.

spider savage

June 12, 2009 5:05 PM

Jd Powers Rated Fiat Dead last in Europe. just below Chrysler.
What a sad combination forced by a nice man named Barry Obama President of The United States of America. All Gee it sounds like a failure. Maybe somehow the two dogs at the bottom can climb out of the basement and roll over the likes of honda and toyota, maybe they can at least get ahead of Renault (the one to watch back in the 80s)

stanley jacob

June 13, 2009 3:29 AM

the world has been buying american company cars created for americans.americans have enforced their tastes on the rest of the world by very good marketing.

here the owner is only changing ,the product remains american.

americans should try to accept the other parts of the world also as their own.

Josh

June 13, 2009 4:12 AM

Fiat will have to adjust the driver room upwards or face selling only to our smaller people.

spider savage

June 13, 2009 9:20 AM

Fiat Chrysler, a marriage made in heaven. JD Powers dual bottom ranked cars together, they can concour the auto industry. NOT!!!!!!!!!

jimbo

June 13, 2009 11:45 AM

Fiat has some of the best looking cars on the market.Will they be a hit in north america time will tell.As far as the auto industry in general, in order for any manufacture to make it they have to be global.Our north american auto companies have just realized this and are on their way to correct this.We will see them again running their companies globally and with success.So for now we have two companies that have teamed up to speed up the process on going global-- good for them I hope it works out.If you dont beleive this global thing all you have to do is look at Volkswagon.

Dan

June 13, 2009 5:07 PM

I find it hard to believe the suddenly FIAT can compete head to head with Honda and Toyota in the worlds most competitive market here in the US. The only Europeans who have competed with Japan (and won) are the Germans with BMW, Mercedes and Audi.

dw

June 13, 2009 7:23 PM

the biggest problem with the FIAT deal is that it will take almost 2 years to get these cares in to production. and what does the company sell in the mean time. and thats dependent on these cars appealing to Americans any way. and where is the money coming from to actually adopt them to US standards anyway? while we needed to save the company, just not sure we couldn't have found some other company to do merge them with

Jeff B

June 15, 2009 9:34 AM

No, No and no.
Chrysler hasn't made a competitive, high quality car in forty years -- maybe longer. They shoudl be out of business. Instead we taxpayers subsidize an Italian takeover of the firm, so that the UAW can be appeased. FIAT is not doing very well even in Europe! What possible chance can there be for two failing businesses to combine and produce great products?

Duilio

June 15, 2009 10:39 AM

I think Fiat can do the job. People in the U.S. are only thinking Fiat will make small cars to replace Chrysler's bigger siblings. But that's wrong. Fiat will build Alfas in North America, too. Probably the 500, the Panda and the Punto are going to be produced in the U.S. The rest will be Alfas. Alfa`s quality has improved a lot and their looks are gorgeous. Italy designs almost 40 percent of all cars built in the world. Pininfarina and Giugiaro are design houses at the top of designing and Fiat does know how to make good cars. Fiat also makes Ferraris and Maseratis, which are the most desirable cars on the planet. There is a lot of talent in the italian company, so let's give it a try.

Doug@terryreport.com

June 15, 2009 1:01 PM

You can't bring a crummy car over here from Europe and expect Americans to cheer. The current Saturn (Opel) Astra, as but one of many examples, did not get the larger engine available in Europe. Yet, there seems a kind of perverseness in the decisions that Detroit makes about what to bring here. There are some great little Ford cars in Europe right now, including a re-tooled Focus. We get, instead, an "updated" Focus with few improvements and bland styling. Ford only promised to bring those Euro models here when gas prices shot upward.

Overall, I would say the premise of Euro cars on American streets has never been given a fair chance by the Detroit companies. The markets are clearly different, but car companies shape and move the market by what they are willing to offer. The Euro cars of 30 or more years ago were not suited to wide open spaces, travel of great distances, the windy American plains, etc.

Why do people buy BMW and Benz? Because they are convinced that it is worth the price. Too often, Americanized imports have been a half baked loaf designed to make a little money without too much effort. In other words, designed to fail.

Andy

June 16, 2009 5:02 PM

George - sounds like you're from the UK, and opining about the American auto industry is a bit hypocritical, no? If anyone should understand free markets, it should be you Brits - after all, the British auto industry was pretty much got their asses kicked for many of the same reasons the American auto industry is in the shape it's in.

john

June 18, 2009 9:55 AM

Italians make absolutely beautiful cars which are reliable. Do not listen to this BS about reliability. I recall when the Korea entered the markets in the US they made that crappy car the Excel. Well low and behold, like at them today; JD Powers would put there Sonata,Genesis, Sante Fe up against any Japanese counterparts. The Italians will do the same. I was fortunate enought to own an 1961 Fiat and still have it today. It has 750k miles on it...I replaced the transmition 3 times but it has the original low end and top end..A Truly beautiful vehicle.

charlie

June 20, 2009 1:59 PM

all of the comments i have read have have a wide range of a personal openion..well here is mine..the quality and performance of any vehicle is important ...but if u cant afford to buy one of any kind because the ceo and his or her buddys have to get the perks and who knoes how many millions in pay let alone bonuses....then the tricle down effect acures...WELL now lets not forget our dealers and shop rates and please dont forget the finance company.. all of just cut the new buyer market to the bare bone .. it is all about how much can i possible make ...oh yes how many of you can truthfully say you have made a million dollars in a life time????????

charlie

June 20, 2009 1:59 PM

all of the comments i have read have have a wide range of a personal openion..well here is mine..the quality and performance of any vehicle is important ...but if u cant afford to buy one of any kind because the ceo and his or her buddys have to get the perks and who knoes how many millions in pay let alone bonuses....then the tricle down effect acures...WELL now lets not forget our dealers and shop rates and please dont forget the finance company.. all of just cut the new buyer market to the bare bone .. it is all about how much can i possible make ...oh yes how many of you can truthfully say you have made a million dollars in a life time????????

yankee2

June 21, 2009 1:42 AM

Fiats have always been notoriously unreliable, especially in America. Perhaps American's try to wring American style performance from them, which equates to driving them hard... Now Fiat is going to revive Chrysler? Fiat's best chance of reviving Chrysler must be its business model, and its styling, but probably not so much its engineering. I might like an Alfa for sport, but when it won't run, my Toyota always will. Any new Chryslers, or Fiats for America, had better be good to lure many customers back.

Jaxon

June 21, 2009 4:46 PM

No.

This news and accompanying uncertainty send a loud and clear message: buyer beware of Chrysler cars. Who is to say they will be around long enough to honor service guarantees.

While the incentives sound inciting, you can still get a good deal from other car companies and maintain your peace of mind.

Rocky

June 22, 2009 3:56 PM

Chevy Cruze 41 mpg at 16K will kill any Fiat offering.

antonio311

June 26, 2009 6:13 PM

The Chrysler / Fiat combo is perfect! Fiats unlike any Asian vehicles are actually FUN to Drive unlike the Asian autos. Also Fiat has superior technology than any asian brand. Their Lean fuel engines are cleaner & more efficient than any other engines in the world. Also They are THE leader in clean Diesel Engines, in the entire world. As for Chrysler, they actually make cars that are fun to drive, I've had more than 5 with over 200,000 trouble free miles. Also Chrysler styling is the industries BEST!! With Chryslers mid sized vehicles & world class Trucks & Minivans, & Fiats Smaller vehicles & midsized cars...it's a winning combination! I'll NEVER support the Japanese or Asian brands, my hard earned $$$ will NOT go back to Japan to support their economy! & I have news for you people that think that since some of their vehicles are made here that the money stays here....IT DOESN'T! The Asian brands have NO innovation what -so- ever!!! And their cars are basically copycat- cars!! Remember that next time you look to purchase a new car!!! Also Chrysler will be stronger than ever, and will be around for another 100 years!

Chris

June 30, 2009 5:50 PM

Fiat has come a long way in the past 10 years, let alone 30 when it was known in the U.S. for reliability issues. Their styling is fresh, handling is competent, and their diesel engines are now the envy of many European automakers. Let's just hope they export or build in the U.S. the same car for us as they have back home. Compromises in suspension, interior materials and power plants will cost them in the end.

Par

July 16, 2009 10:57 AM

ROCKY, GM is building some Chevys and Buicks in CHINA. Buy American???

abh3

July 26, 2009 8:58 AM

Go look at a Dodge Caliber if you want to know what went wrong at Chrysler but I'd buy a Fiat Panda 4x4 turbodiesel TODAY at a Mopar dealer if I could. Anyone who has spent time in Europe understands how American automakers ruin Euro-cars in the translation (Ford Mondeo = Contour?!?), if Chrysler can resist the urge to soften the Fiats up and fill them with chintz they will have several winners...

mauro

August 4, 2009 12:44 AM

ferrari lamborghini bucatti maserati alfaromeo lancia fiat vespa ducati aprilia guzzi benelli laverda iveco..we coming long way brothers...american love italian product..or not??..salute and god blass fiat and crysler for next 100 years..

Alex

August 17, 2009 4:44 PM

Im sorry to say this but american cars in the last 20 years are as ugly as your big fat toe, they are giant ugly cars with no sense of style, they are just brute, and no very efficent in terms of gas consumption, per example camaros, mustangs, pontiacs etc they have huge engines, but no stability, and low confort, in terms of design Italians and germans and even british cars are way ahead!
I dont understand how americans keep designing huge engines when they went to war because of oil!
It does not make any sense
take a good look of the downfall of the american car industry, because people of the world prefer to buy a european car than an american disposable can.

Thomas

August 18, 2009 5:54 PM

I hope that the people will think about the economic engines from abroad instead of the wasteful blocks from the US.

Europeans don't by US cars cause they are bigger than the needs and they are awaiting a high stage of quality
If the quality is bad for the european market you will be dropped like a hot potato, like it happened to Proton on the german market. Only Kia and Hundai entered the market coming from Korea. The latest sucessful newentries to the market were all linked with a well known brand like Skoda to Volkswagen and Dacia to Renault.

So maybe thats the thing for FIAT (Alfa Romeo, Lancia, Maserati, Ferrari)? FIAT linked with Chrysler...

LEONARDO

October 12, 2009 10:09 PM

I AM LUCKY ENOUGH TO GET TO EUROPE ABOUT 3 TIMES A YEAR..IN THE PAST FEW WEEKS I HAVE DRIVEN A FIAT 500 TURBO DIESEL ABOUT 2500 KL , ALL OVER AUSTRIA. IT WAS VERY FAST ( TUNING CHIP INSTAULED ) GREAT HI SPEED HANDLING,AND A DIESEL MISER ON FUEL.THEY WORK WELL..PLENTY OF ROOM FOR MISBEHAVING WITH SOMEONE'S GIRLFRIEND.FULL RECLINING SEATS AND MONSTER SOUND SYSTEM TO KEEP YOU IN TIME..OHHHHH WHAT A CAR....FIATO

Leo M. Gates

January 16, 2010 3:41 AM

I was lucky enough to buy a Ford Contour 8 years ago with 25,000 miles on it and paid about $6,000. I still have it. (5 speed, 2.0 Zetec). Parts will be difficult to obtain as time passes but for now, I'm driving a German Ford.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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