Why do Fiats always seem to arrive here with shaky dealer networks?

I recall when they departed these shores in the late 1970s (early 1980s?). Cars with delicate little parts like door levers and no dealer network for replacement parts leave a bitter taste in owners' mouths. Lancia was in the same boat. Even worse, they're saddled with the anchor of Chrysler, a company that does not seem to know how to make a profit. Chrysler may very well drag Fiat down with it.

• Mon, 06/01/2009 - 14:56
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Marchionne (Fiat CEO) is very clear that broad line car makers must sell about 5.5 million units per year to be successful. Fiat currently does about 2 million and Chrysler does about 2 million. That isn't 5.5, but is much closer. And, as we saw with Fiat's run at Opel, Mr. Marchionne clearly wants to do another acquistion as well.

What Chrysler gives Fiat, according to Fiat: scale for platforms, purchasing economies, some expertise in large cars (including trucks, SUVs and crossovers), distribution where Fiat doesn't have it to go with the scale, and plants for making Fiats. Almost all of this is looking beyond current line ups to the intro of Fiats and Alfas as world cars and the creation of new large cars for world markets.

BTW, companies with more than 5.5 million units sold per year: Toyota, GM, VW, Ford, Renault/Nissan. That's it. Honda, Hyundai, PSA and others have work to do he thinks. Marchionne clearly feels that the whole auto industry, not just the Detroit 3, is going through a cataclysmic restructuring.

• Tue, 06/02/2009 - 18:49
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Hyundai/KIAs sales are increasing in most markets, while in the US, the sales are down nearly 20%.   While Nissan/Renault sales are dropping by nearly 40% in the US.   However, America doesnt really matter all that much anymore since those makes along with others now sell more cars in China than they do here in America.

-Always Drive Foreign, the real patriotic thing to do is to let our wasteful auto industry to collapse so we can Nationalize it.  We still make good trucks though.

• Wed, 06/03/2009 - 01:15
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Thanks, Tom, it's interesting to get Marchionne's view on the matter.  

I can understand the desire for more scale.  However one could also argue that scale alone is far from a business panacea (GM, is an obvious example).

So, I suppose he believes that picking up a post-bankruptcy Chrysler (without retiree obligations, a "cleaned up" dealer network and other bad issues off the books) is better than simply swooping in and picking up the manufacturing capacity he needs and putting together a dealer network from willing and enthusiastic new franchisees.

Perhaps he's right, time will tell. To my original question, I really don't see Chrysler supplying them with a heck of a lot toward these goals.  Perhaps the Jeep brand is a great snag, especially seeing that Fiat is reportedly making this happen with no cash of their own.  But, Chrysler's has few good current products and little on the horizon. Even the "good Chrysler" is continuing with a huge and problematic backlog of inventory. Their dealer network in large part is inappropriately staffed and located to sell the Fiat and Alfa Romeo products Tom mentioned.  And, for what it would cost to refab a Chrysler factory to build Fiats and Alfa they could just as well have been handed an empty shell along with milions in local and state tax incentives.

There is also some irony here since some of Marchionne's justifications are similar to those used by GM leadership when they bought a part of Fiat a few years ago.  If I recall correctly, they were impressed by Fiat's economies of scale, parts supplier network, Diesel engines, and network in Europe.  That deal worked out great for Fiat to the tune of $2 billion or so.   

I don't mean to sound like I'm totally negative here.  I hope this works out.  Not only do I look forward to some interesting and exciting small Italian cars in the U.S. again, but I hope that thousands of steady jobs are created on the manufacturing and retail ends of this deal.   

• Wed, 06/03/2009 - 11:42
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