December 2, 2022

Louis I Vuitton

Savvy Car Technicians

Take it or Leave it? Fiat Boss Doesn’t Care if the New 500e Generates Big Sales Numbers

Fiat boss Olivier Francois would be quite pleased if you’d buy a new 500e minicar. But he’d be just fine if you didn’t.

Francois with Armani 500e in LA 2022
Olivier Francois, Fiat CEO and Global CMO Stellantis, talks about the 500e’s return while introducing the 500 Armani.

Fiat stopped selling the old 500 — and 500e — model in the U.S. market at the end of the 2019 model year, the little coupe falling victim to the shift from passenger cars to SUVs and CUVs. But it’s now bringing the minicar back in all-electric form.

During the debut of the new 500e at the LA Auto Show, Francois was surprisingly ambiguous about the return to the American market, explaining that for every one purchased in the States, Fiat would lose sales and market share in Europe.

“I don’t need the U.S.”

“We’re capacity constrained. I can sell everything we make. I don’t need the U.S.,” said the 61-year-old executive, who serves as both global CEO of the Fiat brand and chief marketing officer for its parent, Stellantis.

The 500 has long been the icon of the Fiat brand. But it faced only marginal success when introduced in the U.S. a decade ago. And Fiat decided to pull it from the States as demand for small, fuel-efficient vehicles began to dry up, millions of motorists shifting to SUVs and CUVs.

Francois with Kartell 500e in LA 2022
Francois said it was the right choice to bring back the 500e as he revealed the 500 Kartell.

So, despite the high-profile launch in L.A., and even though he’s confident Americans “are going to love it,” Francois said. “I’m not going to push the car.”

“America doesn’t need Fiat”

The plan he’s put in place calls for a limited focus on a handful of urban markets where the small size of the 500e will be seen as an attribute and its relatively limited range shouldn’t matter much to potential buyers.

The electric minicar, he said during an interview, is the “anti-Swiss Army knife,” in sharp contrast to the go-anywhere, do-anything utility vehicles that today dominate the market. “I want (it to) be the perfect car” for urban buyers.

“America,” the executive declared during the L.A. unveiling, “doesn’t need Fiat, doesn’t need an average mainstream car brand doing mainstream cars. We are not bringing anything really new to the party, but where America needs us is to make this polarizing, niche, unique statement, and that’s where the 500 and, today, this new 500 electric are playing. That’s our space, so we’ll stick to that space.”

Fiat plans to use a non-traditional sales and marketing strategy

The late FCA CEO Sergio Marchionne once begged people not to buy the 500e, because it lost $14,000 on each one.

With the 500e not set to reach the U.S. market until 2024, Fiat has yet to lock down the marketing plan for the electric minicar. But Francois made it clear that its approach will be as different as the 500e itself.

Among other things, Fiat is looking at the possibility of using a subscription program, rather than a conventional lease or sales strategy. He declined to discuss details, but one possibility would be an open-ended arrangement in which customers could pay on a month-to-month basis and hand back the keys whenever they wanted.

Not the first time

Fiat has had a troubled relationship with the U.S. market. After a 27-year absence, it returned to the States in 2011 following the Italian brand’s merger with a post-bankruptcy Chrysler. The late Sergio Marchione, then Fiat Chrysler’s CEO, had an optimistic goal of selling 78,000 Fiats in the States by 2013. But demand never came close, topping out at 46,121 in 2014.

Even with the addition of two crossovers, the 500L and 500X, it managed to sell just 9,200 in the U.S. in 2019, the year the 500 minicar was dropped from the American line-up. That dipped to a meager 2,374 in 2021.

Ironically, Fiat’s current boss isn’t the first to say he didn’t care how many vehicles he sold in the U.S. When the first-generation 500e was introduced in 2013, former FCA CEO Marchionne went so far as to encourage potential customers not to buy it, explaining that the battery drive system was so expensive Fiat lost more than $14,000 on every one it sold.