It's easy to look at Fiat's paltry sales in the U.S. and argue that the Italian brand so beloved by former Fiat Chrysler Automobiles CEO Sergio Marchionne is simply a prominent victim of consumer trends away from small cars, or that its return to the U.S. in 2011 was ill-timed against then-falling and now-stabilized fuel prices.
But the easy explanation isn't a complete one because it doesn't take into account the years of tone-deaf pricing strategy, brand neglect and product starvation that ultimately laid the mass-market brand so low in the world's most profitable automotive market.
In Fiat's apparent American failure, there is plenty of blame to go around as well as a valuable lesson for dealers and their automaker partners.
Much of that blame Marchionne rightfully laid upon himself. In January 2012, less than a year into the brand's return to the U.S., Marchionne admitted that he had erred in walling off Fiat from what had been the Chrysler dealer body, inflicting huge initial costs on dealers willing to take a chance on the quirky 500.
His insistence that Fiat dealers build pricey, standalone studios instead of incorporating the brand into their existing rooftops added unnecessary overhead to Fiat's fledgling one-product operations and robbed the vast majority of Chrysler dealers of what was then a much-needed fuel-efficient alternative product offering.
Marchionne apologized to dealers, but the brand never really recovered.
Fiat's first five years in the U.S. were a series of botched attempts to make up for that initial stumble. The bigger 500L sported a troubled dual-dry-clutch transmission. The all-wheel-drive 500X had fuel economy that lagged that of competitors. And the 500e? Marchionne said he lost $14,000 on each one he sold.
In 2013, Marchionne promised U.S. dealers they would see four new models, but they got just two: the 500X and the Mazda-built 124 Spider roadster.
FCA seemed to switch to a strategy of neglect and starvation, cutting marketing dollars and product investment, to the detriment of its long-struggling dealers.
Which leaves us with a hard question: Is FCA doing any better with Chrysler and Dodge?
