Fiat NA Management Shake-Up No SurpriseBy Michelle Krebs November 22, 2011
It came as no surprise that Laura Soave, who headed the Fiat brand in North America during its launch, had left the auto company and quickly was replaced by Chrysler Group LLC Monday. For weeks, her whereabouts within the Chrysler/Fiat organization had been grist for the rumor mill. Only last week, Chrysler/Fiat CEO Sergio Marchionne hinted changes were coming due to disappointing sales result for the Fiat 500. So on Monday, Chrysler, indeed, announced Soave (above) had left the automaker to pursue other interests. She was replaced by Timothy Kuniskis, most recently director for Chrysler and Fiat brand product marketing, is the new head of the Fiat brand for North America effective immediately.
Soave, who as a young, stylish Italian-American was perfectly cast to head the revival of Fiat, faced an uphill battle from the start. First, she was assigned to re-establish the Fiat brand in North America that for part of the market had no reputation or recognition at all. Worse, it had the bad fix-it-again-Tony reputation from those who knew the brand. Re-establishing the brand meant establishing a new dealer network, an effort that did not go as smoothly or as quickly as Chrysler/Fiat wanted it to. Not surprising since Fiat largely was tapping current Chrysler dealers who are gun shy, having endured a constant churn of Chrysler ownership. Ownership that demanded outlandish terms of commitment and investment, responded to with unmet promises by the auto company, culminating with the Chapter 11 bankruptcy that wiped out some dealers.
She was challenged by launching a teeny-tiny car into a new segment, the size of which in the United States remains unknown. Americans in the past haven't been big on small cars. In addition, the tiny Fiat 500 was launched into a U.S. market that was seeing a flurry of introductions of outstanding small cars (Ford Fiesta and Focus, Chevrolet Cruze and Sonic, Hyundai Elantra and Accent, to name only a few.) Some of new entries are bigger and roomier than the 500, achieve as good or better fuel economy (without the pricier premium gasoline the 500 requires) and at about the same price. In other words, American consumers will always buy as much car as they can for the bucks and they likely see getting more for their money in a model from a tried-and-true brand than going with a pricier upstart. The 500, whose quality is yet unproven in the United States, also may suffer some of the "girl car" image of the earlier Volkswagen Beetle as well, which limits its market. Soave was handed a sales goal 50,000 500 models a year that raised eyebrows from day one. Through the end of October, Fiat hasnt even sold 16,000 of them, and successful Mini has sold just over 27,000.
And all of this, Soave had to accomplish on a shoestring budget because that's the way Chrysler has to do things these days until cash flow improves. Only now are significant marketing dollars being spent on the 500 via Jennifer Lopez advertisements. Chrysler/Fiat expect great things of Soaves replacement. Tim (Kuniskis) brings broad expertise and leadership in dealer operations and marketing where he has been already working with the team to shape the direction of the Fiat Brand, Marchionne said in a statement. Good luck Tim Kuniskis and to you too Laura Soave. Shes undoubtedly learned much from this once-in-a-lifetime experience of launching a brand, even if it wasnt successful on her watch. Shell land a good gig.