Fiat abandoned the U.S. market 30 years ago, but it's back with a updated version of its iconic Fiat 500, which defined the company for postwar Americans But the new model may be plunging into a market that has outgrown such "design cars."
Design cars? Think of BMW's Mini and Volkswagen's revamped Beetle. These vehicles aren't intended to provide basic transportation so much as to serve as rolling forms of self-expression. If you drive one, you probably own a MacBook and an iPhone and care about midcentury modern furniture.
Cars for the creative class
Advertising Age insists that Fiat is aiming to sell the 500 to the U.S. "creative class," a concept popularized by the urban theorist Richard Florida. You know the drill: these are the big city professionals, working in the knowledge industries who want their car to be an extension of their sense of style. They made the MINI a hit.
A potential flaw in Fiat's plan is that retro design cars have enjoyed their moment and are now being replaced in the aspirational psyche of the creative class by high-tech electric cars and plug-in EVs, such as the Nissan Leaf, the Chevy Volt, and the Ford Focus Electric. An electric version of the 500 is supposed to arrive in 2012, but you have to wonder if that will be too late, as by then the EV market is going to be getting crowded.
But you always try to compete on the cheap
Fiat hopes that this can be overcome by the 500's sticker price, which is thousands lower than the Mini and, as Ad Age points out, not that much steeper in the base model than an entry-level Toyota Yaris. Yes, Fiat will be returning to America with one of the cheapest "halo" cars in recent memory. By doing so, the company also hopes to lure buyers back to Chrysler and to build a bridgehead for the revival of the Alfa Romeo luxury brand.
Can Fiat and Chrysler time the market?
What the 500 does have going for it is the prospect of much more expensive gas in the near future. If you recall, a factor that tipped both Chrysler and General Motors into bankruptcy in 2009 was the gas price shock of the summer of 2008. When gas moved above $4 a gallon, the truck- and large-car market collapsed. Gas prices are now creeping up again, making small cars attractive to consumers. Due to its low price and snappy looks, the Fiat 500 is a standout competitor in this challenging category.
Still, my sense is that retro design cars are on their way out. The actual cars of the future are beginning to develop their own visual distinctiveness, a kind of aerodynamic yet utilitarian flair defined by the Toyota Prius and imitated by the Leaf and the Focus Electric.
But if the new 500 gets attention, it will be mission accomplished
Since bankruptcy, Chrysler has been on the dark side of the moon, product-wise. It continues to be known for its minivans, its pickup trucks, some retro muscle cars, and of course Jeep, but it's been a while since anything fresh came out of America's perennial number three carmaker. The U.S. public needs to get reacquainted with the company, and the arrival of the 500 will give them an excuse, as Fiat plans to sell Chrysler brands at its new Fiat dealerships.
There's buzz around the 500. But if Fiat and Chrysler are smart, they won't assume it's buzz that's built to last.