US Fiat 500 sales have been below expectations, apparently prompting Soaves exit

US Fiat 500 sales have been below expectations, apparently prompting Soave's exit

Chrysler has replaced Laura Soave with Timothy Kuniskis as head of the Fiat brand for North America effective immediately. "Laura Soave has left the company and will pursue other interests," the automaker said in a statement without elaborating.

Kuniskis was most recently director of both the Chrysler brand and Fiat brand product marketing. The move is effective immediately.

Kuniskis now heads Fiat sales, marketing, dealer network and service. The 500 Abarth was launched at the Los Angeles show this week.

"Tim brings broad expertise and leadership in dealer operations and marketing where he has been already working with the team to shape the direction of the Fiat brand," said Chrysler chairman and CEO Sergio Marchionne in the statement.

"...much of his immediate focus will be working with the dealer body where his fresh perspective from the operational side, as well as that on the commercial side, will begin the brand's next chapter."

Kuniskis joined Chrysler in 1992.

Edmunds.com senior analyst Michelle Krebs said: "The departure of Laura Soave comes as no surprise. Her whereabouts within the Chrysler/Fiat organisation had been grist for the rumour mill for several weeks.

"She faced an uphill battle from the start: "She was assigned to establish a "new" brand that, for part of the market, had no reputation or recognition to another part for which it had a bad reputation [Fiat pulled out of the US in 1979 after consumers shunned its poor quality cars and patchy dealer network - ed].

"She had to establish a dealer network, which did not go as smoothly nor as quickly as expected by Chrysler.

"She was launching a small car in a segment of the market that the potential size of which is unknown. Americans haven't been big on small cars. In addition, a flurry of outstanding small cars came onto the market this past year (including Ford Fiesta and Focus, Chevrolet Cruze and Sonic, Hyundai Elantra and Accent) some of which are bigger than the 500, get as good fuel economy (and the 500 requires premium 93-octane petrol  in contrast to some of its competitors) and at about the same price (the 500 was priced too high.)

"In other words, American consumers may see a model from a tried-and-true brand as getting more for their money. The 500 may suffer some of the 'girl car' image of the earlier Volkswagen Beetle as well, which limits its market."

Krebs added that Chrysler was also too ambitious: "The goal of 50,000 a year raised eyebrows at the time; way too high.

"And all of this, Laura had to accomplish on a shoestring budget because that's the way Chrysler has to do things these days until cash flow improves. Only now are significant marketing dollars being spent on the 500."

The website detroitbureau.com said Chrysler had so far sold barely 16,000 units and volume was under 2,000 in October.

“Fiat brand is entering a new chapter and it has been deemed appropriate to entrust Tim with the responsibility for the marque in North America,” Chrysler spokesman Gualberto Ranieri told the website, noting the dealer network had taken longer to develop than planned.

Fiat now has its full complement of dealers, 130, while the awareness of the Fiat brand also has been growing, he added.

The maker had initially tried to downplay the shortfall in Fiat 500 sales, insisting it was largely the result of not having enough dealers in place.

The website noted that industry analysts had been questioning the viability of Fiat’s return to the US. Chrysler has required dealers to set up stand-alone showrooms for the brand rather than sharing facilities with other Chrysler brands - Chrysler, Dodge, Ram and Jeep.

That, the report added, might have been more viable had Fiat also moved ahead with plans to re-launch Alfa Romeo in the US but that has been pushed back several years by Marchionne due to his concerns about having the right products in place for the American market.

Soave was named to head Fiat in spring 2010, reintroducing a brand last sold in the US in 1979.

Edmunds.com's Inside Line said: "It was a tough assignment given that Fiat would have only one model to sell and it expected to do it through a brand new network of stand-alone dealers. The rollout of those dealers didn't go as quickly as planned, so it's no surprise that sales suffered."