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Ford CEO Alan Mulally Believes Fiat 500 Won’t Succeed in the USA

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There’s been a lot of hype surrounding the U.S. launch of the Fiat 500, with many predicting a commercial success for the Italian mini even before it landed on this side of the Atlantic. However, there’s one industry executive that doesn’t believe in Fiat’s retro-penned hatchback. We’re talking about Ford CEO Alan Mulally. When asked about the market prospects of the Fiat 500 in the United States in an interview with Italian-language news magazine Panorama, Mulally said: "I do not see large market in the U.S.A. for a smaller car than the Fiesta. Those that tried failed.”

Even though Mulally did not elaborate, it is believed that his reference to “failure” was aimed at Dailmer’s Smart ForTwo which saw its U.S. sales plummet from 24,622 cars in 2008 to a mere 5,927 units last year.

The Chrysler Group recently celebrated the the production launch of the American market Fiat 500 at the Detroit firm's Toluca plant in Mexico. The starting MSRP for the Italian mini, which is offered with a 1.4-liter four-cylinder producing 101HP, is $15,550.

Source: Panorama via Asca.it



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36 Comments:

Anonymous said... »March 10, 2011

mmh, not sure this contradicts Marchionne's own idea. According to Sergio, the 500 is not intended to be sold everywhere to everyone, but only to sell in select markets. They both appear the be saying the same thing, but in different ways.

Anonymous said... »March 10, 2011

Well, what else should have he said? He's up to market his Fiestas as the smallest thing Americans would buy. It's a shame Minis are still selling well and the 500 is roomier than the German car. On the other hand, if they believed a small car could be sold in the USA they would have brought over the European Ford Ka... But that's exactly a Fiat 500.

Anonymous said... »March 10, 2011

I wonder if Mr. Mullaly ever heard of car called "Mini". The Mini Cooper is certainly smaller then a Fiesta and has sold quite well. Further the Fiat 500 is really marketing the car like Mini has. Next year it will offer a turbo Abarth,a convertable and then a 4dr. Why would Mini make it and the 500 not make it?

Anonymous said... »March 10, 2011

Heh, "There's no market in the U.S. for a car smaller than the Fiesta. Speaking of the Fiesta, have you test driven one yet? Because they're really great small cars and I hear they're good value for money too..." - lol

Anonymous said... »March 10, 2011

Actually he is partially right,
proof has been the Smart which was not the big hit expected.

In Europe where the narrow city streets suffer from traffic jams every day and park space is hard to find in big European towns,
the small cars like the Smart or the 500 do make sense.
In America people are also used to another way of thinking and dealing with those situations,
and for sure they visualize in their cars their own ego.
American buyers like big cars, they do feel that small cars are kind of tiny rubbish toys,
therefore they don't even bother to have a look at small cars.

One thing is for sure.
If those small cars like the 500 or the Fiesta meet a success in the US,
other manufacturers (german, japanese etc) are ready to launch their own small city cars too,
see the vw polo etc.

Anonymous said... »March 10, 2011

Out-of-touch CEO, and toeing the company line.

Anonymous said... »March 10, 2011

"I wonder if Mr. Mullaly ever heard of car called "Mini". The Mini Cooper is certainly smaller then a Fiesta and has sold quite well."

Considering that the Mini and the Fiesta are compacts and sub-compacts respectively, and both those segment sell well in NA, a city car (the 500) isn't going to have it easy in a segment populated by the Fourtwo which in itself is not making much of a big splash.

The Mini is most certainly NOT a city car by any stretch of the imagination.

Anonymous said... »March 10, 2011

Comparing a Smart with a 500 (or with any other A segment car like the Yaris, the Spark and many others) does not make sense. A potential Smart buyer could think about buying one of those indeed, but not the way round so we are speaking about a different market niche. The Smart does not have the same popularity all over Europe, and it's not such a popular model anyway. We all know that American buyers like big cars (and other big things on wheels to be true). It's always been like this but things are changing. Americans are becoming more enviromentally aware, petrol prices are unpredictable, plus it's easier to market a European sized car in the rest of the world rather than a big American one. So chances are that American buyers will be "driven" to accept smaller, safe, well built and energy efficient cars, like people do in the rest of the planet.

Anonymous said... »March 10, 2011

FYI the 500 is 34 inches longer than a Smart, which has only two seats. The 500 is 7 inches shorter than a Mini but it's bigger inside. If you tell me that a Mini is a better car than a 500 I can agree with you, but I could expect that from a car that's at least 4000 US$ more expensive. In Europe the Mini and the Fiesta both belong to the B segment, the Fiesta is bigger. The Focus, Golf and such belong to the C segment that translates into compact over there, I think..

Anonymous said... »March 10, 2011

The comments speaking of spaciousness and other virtues of small cars certainly come from people who don't know the american market.
The Americans (men or women) want their vehicle to be at least 5 meter long, powered by a 4L engine producing at least 200hp. Anything else is obsolete. This is their minimum need, and we are not judging their preferences, we are just facing the reality of a consumer who is used to certain habits.

It doesn't matter whether a small dimension 500 car is several inches longer than a Smart or equal to a Mini, it only counts that it is no big enough in the eyes of the average American (male or female), like it or not this is the way of thinking in the US.

The perception is that a short dimension car equals to a waste of money for a tiny car bin, with no guaranteed safety and no driving skills.

JW said... »March 10, 2011

I'd take a MINI, Smart, or a 500 over a Fiesta any day. The Fiestas look weird to me, the ones that I have seen in person anyways. Aren't Fiesta about the same size as an '03 Focus anyways?

Anonymous said... »March 10, 2011

What do you expect him to say? "They will sell the **** out of these and leave us in the dust."

After viewing the 500 at the Chicago Auto Show . . . I have to agree with him. I thought I would be thoroughly impressed with it. I walked away shaking my head. Other than high school girls, who in the world is going to buy the 500? Might be an OK city car if you check your testosterone at the door. The comparison to the Mini is absurd. I have owned three Minis, I have driven three Minis, the Mini is a personal friend of mine . . . and I can assure you that the 500 is no Mini. There is a reason why a Mini is 1.5 times the price. Mainly because it is twice the car. Hell. the 500 is no Honda Fit. Another excellent alternative at about the same price. Even at $4 a gallon, there aren't enough cheerleaders or secretaries out there to buy this thing.

Anonymous said... »March 10, 2011

"obsolete"? Are you sure you picked the right adjective? If Fiat/Chrysler's target is to sell as many 500s as BMW did with their Mini we are facing the reality of a consumer who has already changed habits (50,000 per year did it so far).

I know the most popular vehicles in the USA have been pick-up trucks for several years, those drivers will not be going to replace their trucks with a sub-compact segment car. But some people who live/work in urban surroundings could be more than willing to scoop around in a smaller and more agile car than a bigger sedan.

If everyone was an average person we'd all drive the same grey car with the same grey interior, with the same engine and accessories. Fortunately we are not all the same.

Anonymous said... »March 10, 2011

Have you checked the fuel economy of the FIAT 500? It is a joke for a car of this size. Should be doing MUCH better, but what do you expect from Italy?

Anonymous said... »March 10, 2011

Howdy Doody Mulally, the cheezy Fiesta does not in any way hold the same cache as the 500 does, nor the Mini.

It's in the Chevy Aveo/Sonic league, cheap crap transportation. Except yours is named after a Mexican party. Lame-o.

Anonymous said... »March 10, 2011

"The Americans (men or women) want their vehicle to be at least 5 meter long, powered by a 4L engine producing at least 200hp."

And you'd be right 30 years ago.

We should all be thankful you're not in charge of selling cars to the yanks; you'd be broke.

What cars that even fit 2 of your criteria are sold there?

Anonymous said... »March 10, 2011

The Mini Cooper is proof that small cars are back in popularity, same goes for the Fiesta. The 500 will sell and to be honest I like the Fiesta but the 500 is a car that looks better and I wouldn't be surprised if the 500 has a cult following.

Anonymous said... »March 10, 2011

""The Americans (men or women) want their vehicle to be at least 5 meter long, powered by a 4L engine producing at least 200hp."

And you'd be right 30 years ago.
We should all be thankful you're not in charge of selling cars to the yanks; you'd be broke.
What cars that even fit 2 of your criteria are sold there?"

Like it or not,
it is true the Americans don't like small cars,
never did and it will be hard to rapidly change.
The only reason why the not so tiny Mini managed to sell a few pieces in a huge market is because it is rather a fashion item, nothing to do with its small dimensions.
Why do you think other companies don't bother launching small cars?

If the companies had hired you, then they would be broke one after another.
Don't act as if you don't get it,
it is not a question of your own beliefs when you have to take decisions as a CEO.
You have to take into account the established preferences of the market,
unless you feel you can take the risk to fail.

Anonymous said... »March 11, 2011

how many of these posts are from actual americans? what you are all saying about american tastes doesn't seem factual--just opinions... more complex markets than you realize.

los angeles, california, usa

Anonymous said... »March 11, 2011

IMO the MINI Cooper S works in the US because of its high-value brand image, [backed by BMW] fun to drive characteristics and its performance.

Perhaps the 500 will work, perhaps it won't but good of Fiat to try.

Anonymous said... »March 11, 2011

Nobody is saying that Americans will buy a car because it's small, the Mini (not so tiny??) sold well despite the fact that it's tiny and relatively expensive, so why can't there be room for other contenders?

General statements like "Americans don't like small cars" don't mean very much. If I said "Americans can't afford buying Ferraris" I would be as much as right. The fact is that the USA is the number one market for Ferrari. So it's always better saying, "I, as most of American people, don't like small cars" or "I, as most of American people, can't afford buying a Ferrari". That doesn't mean there cannot be a profitable market share targeted to other people who do.

Anonymous said... »March 11, 2011

The fact that he even made that statement shows he is scared. Also, by doing so he is disparaging small cars which is counterproductive to selling Fiesta's. If Mulally is unaware of Mini's success in the US, than he needs to go back to building planes. Now I wonder is this guy has been more lucky than smart.

Anonymous said... »March 11, 2011

Hey Alan, this is why you're such a genius. Giving Chrysler/Fiat free publicity by opening your big mouth instead of concentrating on, oh yeah, Ford! Brilliant strategy Alan!

Pierre said... »March 11, 2011

And also I'd like to add that american don't buy diesel.
Why is VW selling so many of them?
I believe that the 500 should do well, but only if the car is not prone to quality failure like the first year Ford introduced the Ford Focus. The difference between the Smart and the 500 is at least you can sit 4 persons in the 500. If the 500 is well built and if they offer a small tiny diesel with the price of fuel on the rise I predict that the 500 will do very well.

Anonymous said... »March 11, 2011

What a shocker! What else would he say? The Smart for Two is not selling because it is no good. Most reviewers said so, Just the opposite is true in the case of the 500.
As to MPG the 500 should get 33/38.
Other Fiat competitors, and their respective 2011 city/highway fuel mileage ratings, include the Chevrolet Aveo (27/35), Honda Fit (27/33), Mazda2 (29/35), Mini Cooper (29/37), and Toyota Yaris (29/36).

Anonymous said... »March 11, 2011

The comparison is bogus and Mulally knows it.

As for it being 'Only' a city car, again bogus. Read some of the reports by journalists who have spent some time behind the wheel of a '500'.

Can't wait to spend my 'US' dollars on the '500'. A dedicated garage area is already is set-up with Fiat and Italian posters and memorabilia from my Fiat and Alfa owning days. Also picked up some new stuff from Fiat.

Captain America said... »March 11, 2011

It'll be a hard sell for those of us who grew up in the '40s and '50s and remember the first attempt. Having said that, you really have to see this car up close and personal--it's pretty cool

Anonymous said... »March 11, 2011

"Why do you think other companies don't bother launching small cars?"

The Fit, the 2, the Aveo/Sonic, the Fiesta, the Yaris, the Rio, the Accent, the Yaris, the 1 series, the B class, the A3...

I mean THOSE OTHER company's wouldn't have bothered with the Yanks if they didn't think their sub-compact cars would sell there. Heck, most of the cars I listed aren't what you would call a 'fashion item'...and yet they sell.

I think you're still wrong AND short-sighted. You're precetion of the yanks REALLY IS 30 years out of date.

Anonymous said... »March 11, 2011

The FIAT 500 is by far the coolest small car around, for fun, quality, price and style.
So, if there's a small car that could sell in the USA , that's jus the 500

Anonymous said... »March 12, 2011

"Have you checked the fuel economy...Should be doing MUCH better, but what do you expect from Italy?"

Just checked the 500 fuel efficiency and it's really good. Oh, btw if you check figures (I doubt you do), you will find that FIAT engines are consistently the most fuel efficient and least polluting (this is worldwide, not only in the UE).

But I guess your prejudicial idiocy will not allow you to admit to that.

Anonymous said... »March 12, 2011

The Fiat 500 is by far the most gay-ish car in the market!

And not only being this Fiat a gay-ish car,
but god damn it is a Fiat!
Who 'll be buying a Fiat and giving all that money?

Not to mention the reliability issues,
all surveys prove Fiat is below average!
After all there is no need to say more,
many of us have owned some Italian car in the past,
we know...

The only excuse you will have after sale,
will be the time you 'll be spending in the garages talking of the fuel consumption
while you 'll be giving all of your money in expenses trying to repair its constant faults.

Anonymous said... »March 13, 2011

@ "the most gay-ish"
Why should you worry then? Everyone will be fine, Fiat will sell well among the American Gay communities (did you also include gay women? That would further broaden their customers...) As, according to your accurate, non prejudicial analysys, one of the hot spots for these communities will become the local garage where these people will take their cars to be fixed on a regular basis, chances are they will start and learn some macho information, like how does an engine work, what lubricant oil to use etc. So in the long run they will become expert car buyers and their next purchase could be a car that you like/approve. Why don't you open a consultancy business next to some Fiat garage?

Anonymous said... »March 13, 2011

You are right:
gays and lubricants do make a perfect match with the 500!
LOL

Anonymous said... »March 13, 2011

I really like the 'Sports' version's new front and rear bumper which distinguishes it from the European models and the US market 'Pop' and 'Lounge' models...

Understand the Convertible and the Abarth [GTi] versionS are due next year

Anonymous said... »March 14, 2011

Fiat 500 will only sell to a specific market. The US market prefers big pick up trucks, SUVs and v6 and v8 cars.

Fiat 500 will only be a hit as a fashion item. Maybe in Hollywood. Everywhere else in the US, pick up trucks and SUVs are the kings of the roads.

Anonymous said... »May 10, 2011

the 500 and the mini are niche market cars.what i see in the fiat it is way overpriced and too small for the general public on our roads they could be deathtraps.
what we need is the focus and ranger with the diesels.
the pickups have been the most popular vehicle for 30+
years due to the versatility towing off road and hauling
although the 1/2 ton market is non existent it either compact or very large we could use a c-10 f-100 d100
with 6cyl gas or 4cyl turbodiesel

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