Can Americans Learn to Love Fiat? Chrysler Hopes So

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Mark Lennihan / AP

Jim Press, president and vice chairman of Chrysler, steps out of a Fiat 500 at the New York International Auto Show.

The tiny Fiat 500 is one of the first cars Chrysler hopes to build in North America through its new alliance with Fiat. "It's highly, highly likely that the Fiat 500 will be built in the NAFTA region," said Chrysler vice chairman Tom LaSorda after the deal with Fiat was completed as part of the company's structured bankruptcy. Lasorda added that Fiats will probably begin showing up in American showrooms within the next few months.

Will they sell? "There is a lot of potential," says a hopeful Ralph Gilles, Chrysler's Vice President of Design, who believes that cars such as the Fiat Punto and Bravo could have great appeal for American buyers. "The technology is there. These guys know how to do it," he says. (See the most important cars of all time.)

That's not how many older Americans think of Fiat, the chronically unreliable cars of Boomers' college years. Though Fiat is an acronym for Fabrica Italiana Automobili Torino (Italian Car Factory of Turin), many older Americans joke that it really stands for Fix It Again Tony. Plagued by chronic breakdowns, Fiat left the American market in 1983 with it's reputation badly tarnished. But Fiat underwent its own transformation after Sergio Marchionne became CEO of the automaker in 2004 and ushered in new talent and technology. Though facing its own financial troubles, the Italian automaker has since been impressing consumers with its eye-catching exterior designs, steady improvement in quality and updated motors.

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In addition to the Fiat 500, which is well known for its styling, Chrysler executives also are known to be interested in Fiat's small, turbo-charged diesel engines, which would immediately give a company best known for minivans a big fuel-economy boost.

LaSorda says much of the work needed to put Fiat's vehicles in compliance with U.S. emission standards and safety regulations has already been completed since talks between the two automakers actually started in March of 2008. "If you take a look at the (new regulations), the sales pickup opportunity is going to start in about 18 months so we're going to be perfectly timed to take advantage of it," said Jim Press, the former Toyota executive, who is now Chrysler's top salesman.

Chrysler showrooms will also be featuring new Chryslers. Press says the company also has eight new products, including a hybrid pick-up truck and electric vehicles set to role out over the next 18 months. While Chrysler has trimmed its engineering staff in the face of the financial crisis, it has kept the important projects alive, Press says.

Last month, Chrysler engineers showed off the Dodge Circuit EV to reporters at the Society of Automotive Engineers annual meeting in Detroit. Chrysler is promising to deliver an all-electric, battery-driven vehicle, such as Dodge Circuit, by the end of 2010. The Dodge Circuit has a range of between 150 and 200 miles before the batteries must be recharged. The car can be recharged via a standard 110 volt or 220 volt outlet found in most single family homes.

Chrysler vehicles will get a dash of Fiat spice. A secretive visit by Fiat executives to Chrysler's design studio in Auburn Hills, Mich., last December convinced Fiat executives that Chrysler could still put some new zip into vehicles such as the Jeep Grand Cherokee. Even before the bailout, Chairman Robert Nardelli had decreed that the company, with help from A123, a battery maker, and General Electric would move ahead to develop electric vehicles with four times the fuel economy of Chrysler's traditional sedans and Jeeps. "We're not going back," Nardelli said.

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