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Fiat thinks small in retro return to win back Americans

Fiat, the Italian auto company, is getting a rare second chance to make a good first impression among American car buyers.

autos Updated: Sep 04, 2011 22:38 IST

Fiat, the Italian auto company, is getting a rare second chance to make a good first impression among American car buyers. And unlike the disastrous end to its first go-round decades ago, the carmaker has already managed to create a buzz.

Fiat owns Chrysler, which it bought as part of Chrysler's government-sponsored bankruptcy two years ago. Now Fiat is using its Chrysler foothold in this country to sell one of its own cars - the Fiat 500 - for the first time since 1983, when it officially left the market.

Lucky for Fiat, few Americans seem to remember Fiat or its past reputation for low quality, which sent sales plunging from a high of 100,511 in 1975 to 14,113 in 1982.

The company's new "500" hatchback is being welcomed, in the words of one analyst, as a "fashion statement" among many new car buyers. Last month, the teeny car, whose trim lines include "Pop" and "Lounge," essentially matched the sales of its chief competition, the Mini Cooper.

Fiat's 101st dealership - the carmaker calls them "studios" and many are nestled in fashionable shopping districts rather than on sprawling suburban lots - opened on Wednesday in Miami, and the full network of 130 across the country is expected to be in operation by year's end. The 500 also will be in the spotlight at the New York Fashion Week this week, when a red-and-green-striped Gucci version will be unveiled.

For the moment, at least, the 500 is the center of attention in the industry's diminutive segment at a time when high gas prices and consumers' interest in downsizing have turned small cars into big sellers. Fiat predicts sales of small cars will double in volume by 2014, and it hopes to capitalize in a way that Chrysler, which specializes in the larger end of the market, could not on its own.

"It's an exceedingly well-built car - very functional, fun to drive and very roomy," said Paul Locigno, a 63-year-old retired consultant in Virginia, who bought a 500 this spring, when he and his wife were looking for something smaller and less thirsty than their pickup truck.

The 500 might be novel to many Americans, but it has been a fixture in Europe since 1957. The version available to North American drivers, built in Mexico with engines from Michigan, was altered with their tastes in mind. Changes include a stronger suspension, a climate control system suited for more extreme temperatures, and the option of an automatic transmission.

Bringing the Fiat brand to the United States with a single model that sells for less than $19,000 on average represents a big bet for the company's chief executive, Sergio Marchionne, as well as for dealers, who were asked to spend considerably to build separate showrooms for a car with unknown potential.

First Published: Sep 04, 2011 22:35 IST