Why the Fiat 500 is Flagging in China

Most Chinese customers are well aware of the Gucci brand. Urban dwellers in fashion conscious metropolises like Beijing and Shanghai probably have a knock-off product or two kicking about in their closets. But then why has Fiat’s decision to link up with the highly regarded Italian fashion brand fallen flat on its face?

The answer to that question is simple: Brand recognition. The Italian automaker has been notoriously slow at forging its own path in the growing Asian market and, because of that, the city car that is seen to rival Mini in Europe and North America is nowhere near as popular amongst fashionistas in the world’s largest car market.

The automaker suffered the same fate when it failed to adequately promote the brand following its US market launch in 2011, falling well below the anticipated 50,000 unit mark.

According to IHS Automotive, Fiat sold less than 600 models of the entire 500 range in China last year. In contrast, sales in Europe accounted for 63% of all units sold (unsurprisingly Italy lead the pack, buying more than 43,000 cars) and North American market sales – including the US, Canada and Mexico – exceeded 52,000 units (43,772 models were sold in the US, while 8,474 found homes in Canada and 396 in Mexico).

Clearly there’s a lot more to slapping a prestigious brand name on a car to have it appeal to a certain fashion conscious demographic. Today’s buyers are far more savvy than any generation before it, and they don’t fall for the usual gimmicks or ads featuring supermodels. For these partnerships to succeed in the real world — be it China or elsewhere — the car brand itself also needs to deliver on the promise.


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