Chrysler’s Mexican-built Fiat 500 will be sold by Chrysler dealers by year’s end according to industry sources. At a price reported to be around $15,500, the 500 will be much cheaper than the BMW Mini Cooper which generally tops the $20k entry price range. With Italy’s Fiat having a 20% investment in Chrysler, it has plenty of management leverage over the automaker, dictating where certain models will be built to cut overhead costs although Fiat isn’t really investing any money into Chrysler itself. The Mexican plant still produces the PT Cruiser, which was slated to stop production this past Summer. But, expect production to shift to the new Fiat model within a few months into 2011. Expect models ranging from 135-160 horsepower, and even a convertible model at some point. They look like perfect fun cars, a sports car in an economy car body.
Some U.S. taxpayers may be disappointed to learn that their Treasury Department investment in Chrysler seems to be only guaranteeing jobs in Mexico. However, things just aren’t as bad as they may seem here. Chrysler repaid those $1.5 billion TARP government loans back in July 2009, at interest rates reported to be around 13%. Chrysler claims that it used the funds to help over 85,000 Chrysler customers finance vehicles through their dealers. The Treasury Department made some good money off the deal. Chrysler is still in business. And 85,000 customers are driving cars they bought on credit because they didn’t have the cash on hand to buy them by writing out a check. It was a win-win-win for everyone.
Now, the next step for Chrysler is whether Fiat’s reintroduction into the U.S. will prove any better than their failed previous attempts. Fiats have always sold well worldwide, except in the U.S.