Fiat and Chrysler CEO Sergio Marchionne admitted at the recent Detroit show that the Toluca, Mexico, plant was yet to start producing the Fiat 500 with an epicyclic-type automatic transmission, an essential feature for the US market where automatics dominate new vehicle sales, because ‘robotised’, or automated manual transmissions, as used on the tiny Fiat in Europe and elsewhere, won’t please American buyers.
So Fiat knocked on the door of Japan’s Aisin to supply the conventional, torque converter equipped automatic with production cars ready for shipping in March.
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A handful of Brazilian, South Korean and Japanese journalists in a room at the Cobo Center, in Detroit, attending a ‘regional’ press conference asked when the Mexican-made car would arrive in Brazil, where manual gearboxes are no problem.
Coming from Mexico duty free, under the free trade agreement with Brazil, pundits are reckoning on a minimum 20% cut off the suggested retail price of the 500 currently imported from Poland.
“I want the [Mexican] 500 in Brazil now,” Marchionne said.
The rush is understandable, but Fiat of Brazil officials promptly explained that it would not be possible before mid-year. Marchionne used the word “now”, not “soon”.
“We will export the 500 to China also,” he added.
There are suggestions Fiat is having trouble fully using the Mexican plant’s 100,000-unit yearly capacity – it was once home to the PT Cruiser. The 500 forecast is 50% for North America and 50% to Central and South America.
Sales in Brazil (70% of the region) in 2010 reached just 1,200 units. Even if the price of the entry version is cut to under R$50,000 (R$60,000 today), it is seemingly too optimistic a goal, perhaps an unattainable one, to achieve 35,000 cars a year. China would be an alternative.
Marchionne declared later he was “not willing to conquer the North American market with the 500, but to play in specific areas”. Toluca production plans will include a convertible, Abarth and electric versions, besides a five-door hatchback.
Comment
The lack of an automatic transmission suitable for the North American market for the launch of the 500 is something of a surprise, but may also reflect the problems which Fiat and Chrysler have in merging their operations and conquering new markets. Fiat wanted to launch the 500 quickly in North America, but it does seem odd that this was done without first ensuring there was an automatic transmission option. North America is almost entirely an automatic market, so Fiat needs Aisin’s automatic transmissions as quickly as possible.
