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Fiat 500 Buyers "Have No Interest" In Manual Transmission, Want "No-Haggle" Pricing


Fiat is hoping to eliminate haggling from the buying experience of the new 500 small car, in what the company claims is a bid to eliminate a stressful process for younger buyers.

Speaking to Automotive News, Fiat USA head Laura Sove stated that "The pricing is the pricing." "The younger generation doesn't haggle. They don't feel comfortable with it. They hate the experience."

Fiat dealers have been briefed on the regulations, including a ban on advertising cars below MSRP. Soave also noted the expected popularity of the automatic gearbox version, claiming that younger customers "never learned how to drive a manual and they have no interest in driving a manual."

More: 2012 Fiat 500 Buyers "Have No Interest" In Manual Transmission, Want "No-Haggle" Pricing on AutoGuide.com
 

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Not sure how Laura comes to the conclusion that young customers "never learned how to drive a manual and they have no interest in driving a manual". When you want to get the most out of your vehicle and have more control over it you will go with manual if you know how to drive it or not, that's if your a real enthusiast!
 

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Unfortunately she is correct about "most" young drivers, and I would also add that most are not enthusiasts. You are correct also, though, and I look forward to the manual tranny.
 

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Curious about the 'no-haggle' policy. Here in western Canada Toyota has a similar policy. It works largely because they can sell every car they make, so there is no incentive for dealers to sell a car for less. Not sure how they operate in other areas.

I don't like the car-buying process myself (and we have just been through it) but I don't like the 'take it or leave it' position on pricing, either.

A friend of ours bought a new mini convertible recently, and it has an automatic transmission. To me it seems counter to the spirit of the car, but she loves it, and doesn't want to drive a manual. She likes the car for all of the other things about it, and is not interested in blasting around corners. Mechanical joy is not part of the equation for her; nice design and style are important to her.

Funny though; I have tended to think of 500 buyers as fans of Fiat, and the 500, and small European cars in general. And that makes me think of manual transmission cars.

But apparently that is not the official Fiat NA line. It could also be LS defending her 'the price is the price' position. It will be interesting to see what the sales figures are after the first year or so.
 

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The fixed pricing allows them to control the market value. I can get a Toyota Yaris for 10,000 - 11,000 dollars. If I add cruise control and air, it might bump it up a couple thousand at most. That would be less than the Honda Fit because it is less desirable right now. I take the 15,500 price for a Fiat 500, and subtract the price of a similarly equipped Yaris. That difference should be the worth of Italian style qualities, that I would be willing to pay extra for.

My analysis is that the maintenance costs will be fairly low, if you are a good driver. Not that the car is brittle, but the parts are likely to be expensive if you need to replace them. The car is no better on gas mileage than competing cars with larger engines (this is the sport engine, after all). And if you had to bet, it is probably not as reliable as a Japanese car overall. So you can weight the factors that are important, and study the competition, and come up with a market value.
 

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The fixed pricing allows them to control the market value. I can get a Toyota Yaris for 10,000 - 11,000 dollars. If I add cruise control and air, it might bump it up a couple thousand at most. That would be less than the Honda Fit because it is less desirable right now. I take the 15,500 price for a Fiat 500, and subtract the price of a similarly equipped Yaris. That difference should be the worth of Italian style qualities, that I would be willing to pay extra for.

My analysis is that the maintenance costs will be fairly low, if you are a good driver. Not that the car is brittle, but the parts are likely to be expensive if you need to replace them. The car is no better on gas mileage than competing cars with larger engines (this is the sport engine, after all). And if you had to bet, it is probably not as reliable as a Japanese car overall. So you can weight the factors that are important, and study the competition, and come up with a market value.
Andy,

Scheduled maintianance cost will be zero for the first 3 years 36,000 miles. A 5 year 50,000 bumper to bumper warrenty means they will have a much better warrenty than anything in their class save the Hundai.

"Fixed Pricing" does NOT let the dealers control the market value. It does allow for each new struggling dealer to make a fair profit and each customer know what he or she will pay for a car without a dealer markup. It does however let Fiat control their profits between them and the dealer which is a good thing.

I think they have very carefully studied the market and are doing a fabulious job trying to capture a siginificant piece of the market share.

Just my $.02
 

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It does seem that automakers are leaning more towards no haggle pricing. Look at Scion, for example.

I'm all for it, honestly. That's the worst part about the whole experience to me.
 

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Thoughts

It does seem that automakers are leaning more towards no haggle pricing. Look at Scion, for example.

I'm all for it, honestly. That's the worst part about the whole experience to me.
Most people younger than 35 years old don't know how to haggle price for anything. They just pay what is on the price tag or in some cases whatever pops up on the scaner at checkout. The art of haggling over a deal is becoming a lost art. I do it every day in business. Sometimes saving $.02 per unit makes all the difference in the world.
 

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I appreciate you thinking that I'm under 35. :p

I negotiate tax audits faily regularly. Doesn't mean that I want to deal with it after hours, too. There's no reason for carmakers to continue with this dinosaur. Obviously, if they didn't make money with it on a net basis, they would have ended it a long time ago.
 

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About market value:

There are different positive and negative effects. For example, when the Dodge Neon came out, it had a lot of buzz and initial buyers got taken in and paid a high price on that Inflated Market Value. Then shortly afterward, people realized the truth about those cars. The market value of the car dropped and those who had bought earlier had an instant depreciation of their vehicle. This kind of effect is not possible if the car sells for a fixed price. So you can call Fixed Pricing controlling whatever your favoured description is, it does not change the economic effects.

Note: there is one loophole, whereby dealers can give inflated trade-in amounts. In that case the company can retaliate by restricting an offending dealer's supply.

I have heard talk that some California dealers are inflating above "Suggested" pricing. On this very blog there is evidence of Canadian dealers coming up with extra spoofy sounding charges. If Fiat is serious, you will see these dealers with very few cars on their lots. So remember to check for that.
 

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My 95 Neon.......

About market value:

There are different positive and negative effects. For example, when the Dodge Neon came out, it had a lot of buzz and initial buyers got taken in and paid a high price on that Inflated Market Value. Then shortly afterward, people realized the truth about those cars. The market value of the car dropped and those who had bought earlier had an instant depreciation of their vehicle. This kind of effect is not possible if the car sells for a fixed price. So you can call Fixed Pricing controlling whatever your favoured description is, it does not change the economic effects.

Note: there is one loophole, whereby dealers can give inflated trade-in amounts. In that case the company can retaliate by restricting an offending dealer's supply.

I have heard talk that some California dealers are inflating above "Suggested" pricing. On this very blog there is evidence of Canadian dealers coming up with extra spoofy sounding charges. If Fiat is serious, you will see these dealers with very few cars on their lots. So remember to check for that.
In the spring of 1995 I bought a Plymouth Neon 2 dor 5 speed to use for work making sales calls. I figured it to be a "throw away" car. Boy was I wrong. I traded it in on a 99 Passat Feb 99 with 154,000 miles on it. Other than oil and filter changes, tires and a set of front brake pads that car cost me less than $250 in maintinance and repair costs.

It was a great little car and served me well.
 

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Not dissing the Neon. It's just that some people who bought them did not realize it was an economy car. As with other American cars, some of the interior materials were not the best quality.

I really like the fact that Fiat is going with fixed pricing. It means you can get a good deal - if you buy the Pop. If you load it up, well, sorry Charlie, Chrysler only lets smart Tuna get a good deal ;)
 

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Not dissing the Neon. It's just that some people who bought them did not realize it was an economy car. As with other American cars, some of the interior materials were not the best quality.

I really like the fact that Fiat is going with fixed pricing. It means you can get a good deal - if you buy the Pop. If you load it up, well, sorry Charlie, Chrysler only lets smart Tuna get a good deal ;)
Agreed,

Charlie Tuna........great marketing.......funny stuff!
 

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Dudes and Dudettes,

Selling at the sticker price does many things. First, it keeps dealers from gouging customers on hot models. Anyone remember what those neon-based PT Cruisers sold for when they first came out? Thunderbirds? Honda Odessey minivans? I used to have people sign a form that said "I bought this car against the advice of my broker" and kept it in the file with their PT Cruiser paperwork. When they came in 18 months later to trade it in and complained about trade value, I would pull that form out.

Second, it will keep larger dealers from putting smaller ones out of business.

Third, Fiat can make demands of dealers as to CSI ratings, dealership appearance, hours, etc when the dealer is profitable. Those demands are harder to enforce when everyone is losing money.

I am a three-pedal devotee, as are my kids, but the bulk of Americans can't drive a manual tranny to save their lives. Initial demand will be enthusiast and will have more manual tranny buyers, but after the first three or four months, the AT will be at least 75% of the business. Mini offered the S only with a manual at first, but they had to give in to the demands of the market eventually.
 

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No haggle pricing? I guess worked for Saturn...oh no...wait a minute...they don't exist anymore, do they?? So a starting pricing is between $16k, $18k and $20k and we are talking about a reskinned ford ka, right?? You can't tell me that those are "buyer-friendly" no-haggle prices.

Don't get me wrong, I like the look of the little Fiat, and I'm seriously considering an Abarth when it arrives. I just think the "no-haggle" idea is one intended to maximize profit and price-fix the market for the car.
 

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I really like the fact that Fiat is going with fixed pricing. It means you can get a good deal - if you buy the Pop. If you load it up, well, sorry Charlie, Chrysler only lets smart Tuna get a good deal ;)
That would be a legitimate statement, if ALL the fiats were build-to-order, but they aren't. You may get stuck with few options but a local car that has been spec'd beyond what you see as a good value.
 

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Your statement about Saturn would be great, if it were true, of course. Saturn went away because of the cars, not the dealership experience. Their original cars were good for a time, then became embarrassing with how outdated they were, then they went to rebadged Opel products when the brand was already on life support.

The dealership experience, actually, if you remember, was the saving grace for many years with the car; they actually got better reviews than most luxury cars for a time, and hmmm - what was a big part of that? Oh yes, the no-haggle pricing. Scion has gone to it, and I don't think it's a trend that will be going away. It's all marketing, anyway; if a no-haggle price is too high, the manufacturer will reduce it across the board, or face reduced demand. It's simple economics.

As far as enthusiasts go, my guess is that you'll have an initial rush of enthusiasts who get the cars, then that will wane as potential buyers drive the cars, then decide to either go somewhere else, or wait on the Abarth (like me :)).
 

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Your statement about Saturn would be great, if it were true, of course. Saturn went away because of the cars, not the dealership experience. Their original cars were good for a time, then became embarrassing with how outdated they were, then they went to rebadged Opel products when the brand was already on life support.

The dealership experience, actually, if you remember, was the saving grace for many years with the car; they actually got better reviews than most luxury cars for a time, and hmmm - what was a big part of that? Oh yes, the no-haggle pricing.
Negative. You can't say that the "dealership experience" being positive is a result of the no-haggle policy. Carmax has a no-haggle policy too. I have NEVER had a good experience at their dealerships and they constantly get trashed in consumer survey reports, mostly because the sales people are insanely rude. Saturn used to baby their customers with free coffee and snacks LONG before anybody else did it. The sales people were trained to be exceedingly polite. These resulted in a positive "dealership experience", not the pricing policy.

At any rate, when the Saturn Sky launched, dealerships all over were seemingly violating the supposed "no-haggle" policy by adding substantial markups to meet super high demand on the car. It turns out that in reality, they weren't...the "no haggle" policy was never intended to protect the consumer against dealer markups in response to heightened demand, but rather to protect the dealerships from reductions due to deflated demand and to create the public image of an artificial minimum demand level (we in the real world call this "price-fixing").
 

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Still no. You can't separate the overall dealership experience at Saturn from the no-haggle policy, as if they were not related. The no-haggle pricing lead to a change from an adversarial relationship to something more positive; survey results at the time were clear on that.

Price fixing involves competitors. You can't price fix against yourself. Setting an artificially high price point will only lead to a reduction in demand, which will result in, you guessed it, lower prices. If Fiat has a no-haggle pricing scheme, and prices are too high, they will get the feedback very quickly, and will have to adjust. Because the dealership situation looks absolutely nothing like Saturn's did when they started up.
 
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