Fiat Customer Experience in the United States
Fiat is an Italian car company headquartered in Turin, Italy. The parent company, Fiat SpA, owns many reputable car brands in the world including Alfa Romeo, Chrysler, Dodge, Ferrari, Jeep and Maserati (fiatspa.com). The company re-entered the US market in 2011 by purchasing a 20% stake in Chrysler. As of January, 2014, Fiat owns 100% of Chrysler (Sloan, 2014). It sells the Fiat 500 line in the US (fiatusa.com). The purpose of this paper is to look at the Fiat customer experience in the US, identify any unmet needs observed and provide a new marketing plan to meet those needs.
Part I: Primary Research
The current car shopping experience at Fiat is boring and lacks the “trendy” and “the new thing” image that its commercials try to portray. We visited the Sierra Fiat of Duarte in Duarte, CA on a Thursday at 3 PM. The first problem we noticed was the close proximity of the dealership to Carmax and a Ford dealership. The size of the building and the lot was also relatively smaller making it harder to find and confusing the place as being part of the nearby Carmax. Display of used cars (other brands such as Ford and Lincoln) mixed with Fiat cars at the beginning of the parking lot also seem to contribute to the confusion. Many people visiting the area seem to have this problem as proven by the salesman who greeted us with the question “Are you looking for Carmax?” To fight the confusion, the dealership had put a large hot air balloon with the word “Sale” on top of the building. However, this was a very generic American flag themed balloon and did not really help identify the place as Fiat. The total absence of customers during our 30 minute visit was the most surprising finding. This blocked us from observing other customers’ experience and interactions. However, the salesman helping us mentioned that weekends are usually busy but February was one of their slowest months. This also made us think deeper about the target market of Fiat and the loss of potential customers on weekdays. In other words, why weren’t customers going to Fiat on weekdays?
Part II: Secondary Research
With 13 auto manufactures, the United States is one of the largest automotive markets in the world (commerce.gov). The economic crisis of 2008 caused a turmoil in the US economy and the auto industry took a big hit (Henning, 2008). This combined with rising gas prices forced a shift in U.S. consumer demand and preferences from big cars such as SUVs to smaller, more fuel-efficient cars. According to Mary Barra, senior vice-president at General Motors, this shift will not “bounce back” and will be “a permanent change” (Wright, 2012). According to Zacks Equity Research, “the automobile industry has completely recovered from the impact of the recession in 2013”. Auto sales in the U.S. increased 8% year over year to 15.6 million units during the year. What’s more, light (small) cars have an increasing trend over the year. According to Auto Industry Data (2013), small and medium cars increased sales 22% while large car sales decreased by 0.5%. For the local California market, California Zero Emission Vehicle standard require a certain percentage of an auto maker's California sales to be zero-tailpipe-emission vehicles and this requirement is expected to ramp up to 16% of sales in 2015. These sales can be either electric vehicles or some other eco-friendly technology. According to Ted Reed (2012), California accounts for a third of all electric vehicles and a quarter of all hybrid vehicles which were sold in the U.S. Scarborough Consumer Statistics reveal 35% of U.S. adults own or lease an SUV. Trucks own the second spot at 30%. Mid-size vehicle is close at 23%. Hybrid Vehicles only accounts 2%. Bigger size cars still play a dominant role for consumers. According to Car Shopping Trends report, 63% of shoppers pay more attention to editorial reviews and 49% of shoppers will look more at the...
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Q1 AUTO INDUSTRY DATA (2013)
Scarborough, (2013, 15 January)
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