Fiat expects U.S. dealers to be profitable within 12 months

Article by Christian Andrei, on August 5, 2011

The typical Fiat dealership should already become profitable between six and 12 months after it opened, according to Laura Soave, head of Fiat North America. In an interview with Automotive News, Soave said that it boils down to the type of facility. She explained that dealers in temporary facilities will make money “a little bit quicker."

He said that with this timeline, numerous stores will post a profit just with sales of the 500 minicar.

She revealed that so far, dealerships have hit the margin numbers projected by Fiat. She didn’t specify a number but according to Chrysler officials late last summer, the 500 would produce gross profits of up to $1,500 from each car.

Soave said that it varies depending on the individual markets but the average store is expected to have sales of 50 vehicles each month. Fiat launched a national advertising campaign on Aug. 1 that is expected to boost consumer traffic.

That’s why it doesn’t come as a surprise that AutoNation Inc. officials trust in the Italian brand. Its second Fiat store opened last week in suburban Atlanta. It’s slated to eventually run seven Fiat stores.

CEO Mike Jackson said that the investment for each location ranges from $1 million to $5 million. He said that there is a delay in the rolling out of stores due to the construction permitting process. Some stores have to be constructed from the ground up while others only need renovation.

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