UPDATE 2-Chrysler replaces head of flagging Fiat brand

Mon Nov 21, 2011 2:53pm EST

* Fiat 500 sales slow due to small dealership network

* Through Oct, Chrysler has sold under 16,000 Fiat 500s

By Deepa Seetharaman

Nov 21 (Reuters) - Chrysler Group LLC, the smallest U.S. automaker, replaced the head of Fiat in North America after the Italian brand fell far short of sales forecasts in the first year of its return to the American market.

Chrysler, which is majority-owned by Fiat SpA , named Timothy Kuniskis on Monday to replace Laura Soave, who joined Chrysler in March 2010 to lead the Fiat's reentry into the U.S. market with its 500 small car.

Kuniskis will take the helm of a brand that is struggling to expand its dealer network and meet Chief Executive Sergio Marchionne's target of 50,000 sales in North America.

The brand is also launching its 2012 Fiat 500 Abarth, a glitzier, performance version of the small car.

Through October, Chrysler has sold less than 16,000 Fiat small cars in the United States. Sales have been slow partly because Fiat dealerships have been slow to come on line.

Chrysler asked dealers to create separate showrooms with their own staff to sell the car.

"The distribution network is probably half a year late," Marchionne, who is CEO of both Chrysler and Fiat, told reporters last week in Toledo, Ohio.

"We've have 50 dealers, 60 dealers trying to sell the car," Marchionne said. "I think Ferrari has more dealers than that."

Chrysler said in a statement that Soave, who previously worked for Volkswagen AG and Ford Motor Co , will pursue other interests.

Kuniskis, who joined Chrysler in 1992, was director of product marketing for the Chrysler and Fiat brand.

Chrysler has ramped up the marketing push for the Fiat 500 brand this fall by hiring performer Jennifer Lopez to tout the brand in advertisements that have boosted consideration of the Fiat brand, according to automotive information provider Edmunds.com.

On Sunday, Lopez performed at the American Music Awards, sharing the stage with a 2012 Fiat 500.

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