Fiat Chrysler Automobiles is offering a lifeline to its troubled Fiat dealers as the brand’s sales continue to struggle.
A new plan, revealed in a two-hour private meeting with Fiat dealers last week, would allow them to sell Fiats in their Chrysler-Jeep-Dodge-Ram stores instead of stand-alone Fiat showrooms; would cut back the number of Fiat trim levels so they wouldn’t overlap and cannibalize each other; and would alter pricing.
“This is a growth plan,” a Fiat Chrysler spokesman said in a statement. “The measures that were outlined to Fiat dealers will allow them to grow their business, and it provides them with a pathway to enhance their profitability.”
Currently, dealers have two separate dealer codes, one for their Fiat stores and one for Chrysler-Jeep-Dodge-Ram showrooms. They’ll now have the option to combine those into one code to help consolidate expenses, although if they do so, they would stop receiving a monthly rent subsidy that will go to owners of standalone Fiat showrooms.
The plan was first reported by Automotive News, which said it could save a retailer selling 15 new Fiats a month an average of $180,000 per year in duplicate third-party vendor expenses.
The option to combine operations would vary by state. Fiat Chrysler said it does not expect droves of standalone Fiat stores to close.
“The majority of our Fiat dealers are dualed with the Alfa Romeo franchise,” a spokesman said in a statement. “We intend to grow both our Fiat and Alfa Romeo brands in the U.S.”
Fiat returned to the U.S. in 2011, but customers have yet to embrace the quirky Italian brand. Sales tumbled 9 percent last month and are down 14.6 percent so far this year.
Fiat most recently launched its 500X crossover last year to go with its 500 and 500L. FCA will add a 124 Spider roadster to the lineup later this year — 50 years after it was first introduced here.
The automaker operates 206 Fiat dealers nationwide, including 126 Fiat/Alfa Romeo stores and 80 Fiat stores in the U.S., the company said.