Chrysler Group LLC, majority owned by Fiat SpA (F), “probably” won’t hit its target to sell 50,000 of the new Fiat 500 in North America this year after it took longer to open new stores than previously expected, an executive said.
The company is intensifying 500 marketing efforts, including a planned promotion in Times Square in New York, Laura Soave, head of the Fiat brand under Chrysler, said in an interview. About 100 Fiat stores have opened in the U.S., including about 30 in July. The goal is to have 130 by year-end.
“We have coverage now, so now is the time for us to turn this up,” she said. “We’ve activated the smaller guerrilla- type marketing, but then these are the bigger events that are going to get us bigger awareness.”
The marketing push and added outlets should increase Fiat 500 U.S. sales at least 30 percent in August over July, Soave said yesterday in an interview at Chrysler’s Auburn Hills, Michigan, headquarters. Chrysler reported U.S. 500 sales of 3,038 in July, with a total of 7,982 for the year so far. Another 3,064 Fiats have sold in Canada this year through July.
Chrysler is responsible for reintroducing the Fiat brand in the U.S. after an absence of almost 30 years.
The U.S. automaker in March began selling the 500, with its clam-shaped hood that evokes the model’s original design, at a starting price of $15,500 against Daimler AG (DAI)’s Smart and Bayerische Motoren Werke AG (BMW)’s Mini small cars.
A national 500 marketing campaign began in early July with advertising that included spots on the Internet and in movie theaters. Earlier this month, television commercials began airing that show a young couple going to a drive-in movie in a Fiat 500.
This weekend, Soave will begin in Manhattan a series of marketing events. The company will park 36 of the cars in Times Square for guests to watch movies on the jumbotron, she said.
On a smaller scale, Fiat has been sending 15 teams with 500s to drive and park around major U.S. markets, such as Los Angeles, to attract attention, showing off a new iPad application and handing out brochures.
Chrysler also began in July offering financing as low as 1.9 percent for 36 months on the hatchback.
Chief Executive Officer Sergio Marchionne, who heads both Fiat and Chrysler, wants to merge the carmakers to reduce costs and generate more than 100 billion euros ($142 billion) in revenue by 2014. Fiat gained control of Chrysler through the U.S. automaker’s 2009 bankruptcy restructuring. Fiat last month increased its ownership stake to 53.5 percent on a fully diluted basis.
Instead of using Chrysler’s existing franchise stores, the automaker picked 130 dealers to open new U.S. Fiat showrooms. Chrysler had wanted those showrooms to open by February for a March marketing push.
Only about a dozen were up and running by late February because it was taking franchise holders longer to get government permit approvals for their projects, Soave has said.
“We lost the whole first quarter,” Soave said. If the store openings had occurred as planned, the sales target would’ve been achieved, she said. Now, that will “probably not” occur this year, she said.
Fiat is working on two more TV commercials to begin running in September along with plans to keep the Fiat marketing push going long-term to build the brand, Soave said.
To contact the reporters on this story: Tim Higgins in Southfield, Michigan at Thiggins21@bloomberg.net;
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