The folks who make their living doing dealership buy-sells agree: There is zero outside interest in buying U.S. Fiat stores.
But among Fiat Chrysler dealers whose showrooms are about to lose their lowest-priced Jeep, Dodge and Chrysler vehicles, Fiat's small stable of low-priced but slow-selling cars is getting a second look.
"If you can put a two-door Fiat 500 in your ad with an MSRP of $16,000 -- especially if you don't have a Dart or a 200 anymore -- that's attractive to a dealer," said Gary Brown, a former chairman of FCA's national dealer council who owns a Fiat dealership and a Chrysler-Jeep-Dodge-Ram dealership on New York's Long Island. "That will keep people coming in the door."
In several locations around the U.S., Chrysler-Jeep-Dodge-Ram dealers are adding Fiat franchises, thanks in large part to a brand reset announced this year by Tim Kuniskis, FCA's head of passenger cars. The reset allows dealers to close their separate Fiat showrooms and combine operations with their Chrysler-Jeep-Dodge-Ram stores and thus dramatically reduce third-party vendor costs.
An FCA spokesman wouldn't comment on how many Fiat franchises are being added to what had been Chrysler-Jeep-Dodge-Ram stores, but it doesn't take long to find them on Fiat's dealer locator.
One is John Jones Chrysler-Dodge-Jeep-Ram-Fiat, in Corydon, Ind., about a half hour west of Louisville, Ky. The dealership added the Fiat franchise "about a month ago," owner John Jones said.
"It seemed like we could sell some extra product by picking that up," Jones said. "We were offered the franchise, and we took it. We think we're going to do real well with it."
Unless FCA finds a manufacturing partner as it is trying to do, its dealers next year will be without three vehicles that appeal to value buyers: the Dodge Dart, Chrysler 200 and Jeep Patriot.
FCA has ended production of the Dart and is scheduled to stop making the 200 and Patriot in December. A redesigned Jeep Compass is to take the place of the Patriot, while FCA has not said what it will do to replace the two sedans in its lineup, as CEO Sergio Marchionne promised to do.
With factory lease subventions and incentives available on the three vehicles, FCA dealers have used them extensively in recent years as affordable new-vehicle options, especially for subprime borrowers.
"I think there's definitely a need for a lower price point to get people in the door and into the brands and into the company," said Rebecca Lindland, a senior analyst at Kelley Blue Book. "The brand itself is not doing great, but very few consumers are really shopping small cars right now. Having something like the Fiat at $16,000 holds some level of appeal to the consumer. It's a great little vehicle for that price point."
Fiat's U.S. sales have fallen, dropping 8 percent in 2015 and another 17 percent through August of this year. The declines occurred despite the brand rolling out new vehicles in both years to broaden its small lineup to four vehicles: the 500 minicar, 500L hatchback, 500X crossover and 124 Spider convertible.
Strong Spider sales
Houston Fiat dealer Steven Wolf said the Mazda-built 124 Spider "is selling pretty well" since it went on sale in June and is drawing new consumers into Fiat showrooms. Wolf remains committed to Fiat and is putting a $1.2 million addition on his dealership to separate Fiat from Alfa Romeo and Maserati.
"In the last 90 days, I've been pleasantly surprised with Fiat," Wolf said. "We did 23 [new Fiat sales] in August, and we should do 25 in September. It's definitely picked up."
Still, it's tough to be a Fiat dealer. In 2015, Fiat dealers averaged just 199 sales per franchise in the U.S., down 6.6 percent from a year earlier, according to the Automotive News Data Center.
Such low throughput numbers mean stand-alone Fiat stores have little value beyond their physical assets, buy-sell experts say.
"No one" is interested in taking over a stand-alone Fiat dealership, said Alan Haig, president of buy-sell advisory firm Haig Partners in Fort Lauderdale, Fla. "I think that brand is dead in the U.S."
Buy-sell adviser Erin Kerrigan agreed, saying a slowing market, especially in small-car sales, lessens demand for stand-alone Fiat stores.
Kerrigan pointed to the sale last year of 11 dealerships by the Sam Swope Auto Group in Louisville, Ky., as an example. After the purchase closed in December, the buyer, Automotive Management Services Inc., abruptly shuttered two of its recently purchased assets: a Mitsubishi store and Fiat of Louisville.
"Inherently, because of the new nature of Fiat, there is more risk associated with that franchise," said Kerrigan, managing director of Kerrigan Advisors in Irvine, Calif. "We just don't see buyers want to take as much risk now that the market's not growing as fast as it was in 2013 and 2014."
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