Are Fiats an Inferior Good?

Recession? What recession? Fiat’s Polish production at record levels.

Just back from a fantastic Economics & Business Studies trip to Krakow, Poland. One thing that struck me as an interesting area for discussion cropped when visiting the Fiat car plant in Tychy, where they make the Fiat 500, Panda – and the Ford Ka too!

Despite the battering the car industry took during the recession, with widespread mothballing of production in many high-profile cases, Fiat saw a 20% increase in orders during 2009 leading to the plant producing a record number of cars for the year.

This, of course, begs the question – are Fiats an inferior good? It is also worth exploring other possible reasons for their unexpected success during the recession, such as heavy discounting, 0% finance offers and the huge popularity of the 500.

If you want an idea of what you can see on a school visit like this, or want to use a video to put this discussion in context, check out this youtube clip

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