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Why Fiat Discontinued Its Iconic 500 Hatchback in the U.S.

Fiat Chrysler Automobiles will discontinue its subcompact 500 model in the U.S., the company announced Sunday. The Fiat 500, initially launched in 1957 as an Italian counterpart to the populist Volkswagen Beetle, was revamped and relaunched in 2007. It first became available in the U.S. in 2011, following the merger of Fiat and Chrysler.

According to a statement from FCA, the 500X compact sport-utility crossover, as well as the larger 500L, will remain on the U.S. market. But the electric version of the car, the 500e, will not. The statement did not address whether a planned revamp of the 500e, into which Fiat is reportedly investing nearly $800 million, would be impacted.

U.S. sales of the 500 have been hammered in recent years. After peaking at 43,772 units in 2012, sales sank to just 5,370 by 2018. The 2019 500e has sold fewer than 100 units per month so far this year.

The Fiat 500's decline reflects a broader crash for subcompact cars. Sales of new cars under $20,000 have declined by a staggering 75%, with the sharpest drops coming since 2015. That return to historical norms reflects persistently low gasoline prices and a record economic expansion, giving Americans free rein to return to their much-beloved big trucks and SUVs.

Other subcompact cars recently pulled from the American market include Fiat’s own Dodge Dart and Chrysler 200, as well as the Chevy Sonic and the Ford Fiesta. The Mini Cooper, Toyota Yaris and Honda Fit remain, but they’re all seeing sales declines. The Fit sold a reported 35,030 units in 2018, for example, down nearly 27% from the previous year.

2019 Fiat 500s will remain available until stock is depleted, which Fiat has said will likely come in 2020.

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