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Fiat scripts a third comeback

The Italian firm will launch a dozen models over the next four years , three of which will be compact SUVs

Swaraj Baggonkar  |  Mumbai 

Two failed alliances in the past 10 years in India would have been enough for any automobile giant to call it quits. Not The Italian giant is in fact busy scripting a fresh comeback with a series of launches.

One reason for this is the Rs 15,000 crore investment the Italian company has already made in the country, even though that hasn’t been enough to capitalize on the auto boom of the last decade. The failure is all too obvious from the following numbers: sales declined a steep 43 per cent during April-October this year. So, at just 5,285 units, remains the smallest volume car maker in India even though it was one of the first to step into the country.

The blueprint for the third comeback includes the introduction of iconic American and Italian premium brands. This, the Turin-headquartered company, hopes will push its market share in India to about five per cent in the “foreseeable future” from a tiny 0.7 per cent last year.

Over the next four years, will launch as many as 12 models including five brand new products. The rest will be “refreshments” and upgrades in the domestic market. The number of launches will far exceed that the Italian company managed during the time it was in a and sales partnership with Tata Motors.

The partnership, under which Tata Motors dealers sold cars, ended earlier this year with deciding to set up its own line of exclusive dealerships.

The flurry of launches will begin with Jeep, the world’s largest selling American sports utility vehicle brand, set to be launched next year. Seeing the increasing tilt towards in India, is keen to tap the demand with the launch of the Wrangler and the under the Jeep brand in India through the fully imported route.

Three of the new models will be compact SUVs, of which two will be under the Jeep brand itself. Powered by small, sub-2 litre engines, the new compact Jeeps will compete against Renault’s Duster, Mahindra Scorpio, and to name a few.

Classified as the B SUV by the company (Mahindra Scorpio, segment), is aiming for a launch in 2015. This will be followed by a C SUV (Mahindra XUV500, Skoda Yeti segment) during 2016. These new line of Jeeps will also be the smallest Jeeps in the world and India will be amongst one of the first countries to have them.

They will be produced at the Ranjangaon facility near Pune, which is owned by the 50:50 Tata Motors-joint venture company, India Automobiles (FIAPL). Some of the engines for the Jeep will be shared with Punto and Tata Indica Vista and be made at the same plant.

These new Jeeps, which are being developed as a collaboration venture between technical centers in India and overseas, will also have a high degree of localisation (around 90 per cent) which will allow to compete aggressively with local players.

Further, a mini SUV under the brand itself will debut in 2014. This will be a sub-4 meter compact SUV, a segment which has drawn the attention of several car makers like Mahindra, Ford, Maruti Suzuki, General Motors and Hyundai recently. Fiat, which calls it B CUV (compact utility vehicle) could price the vehicle at around Rs 5-6 lakh.

Further, Abarth, the Italian racing specialist owned by Fiat, will also make its way to the country. ‘Abarth’ versions, which have higher power output and superior driveability, may be seen in the 500 or Grande Punto in the coming period. The Abarth versions, tuned for better performance, will be priced at a premium compared to the general versions of the same models. These will be positioned as aspirational and lifestyle products.

Further, all-new versions of the Grande Punto (premium hatchback) and Linea (sedan), which are presently on sale in India, will hit the market in 2014. A ‘special model’ of both the models will also debut in the ensuing year. A Linea Classic will drive in around 2013-14.

Mike Manley, president and chief executive – Jeep and chief operating officer for Asia -Fiat, says, “Asia offers the maximum growth to us and we have a significant upside to capacity here. Once we get the flexibility of platforms, we can think about having more products. I am confident that the market will respect our brands”.

is expecting the Indian automotive market to post a compounded annual growth rate of 9.2 per cent by 2016, by when the yearly volumes will reach 3.7 million units from 2.6 million units per annum presently. This growth is one of the biggest in the world.

The Indian market is presently the fifth largest in the world and the third biggest in Asia. It is also the ninth largest market for the group. covers 22 per cent of the Indian market currently with two models and hopes to cover 40 per cent with the introduction of the planned new models.

Besides product launches, also wants to fill the huge gaps in consumer approach, brand focus, and product distribution and consumer satisfaction. The company is taking a number of steps including launch of financial services, improved parts availability, a new website and a call center.

It is also launching Mopar in India, which will take care of all the component needs of the vehicles. The company plans to have 120 exclusive dealers, covering 126 cities by 2013 from under 10 presently. These will cover 80 per cent of the Indian market. About 32 dealers, covering 25 cities, will sell the Jeep products. The company is yet to decide if Jeep will be sold through the branded outlets or have independent showrooms.

But will the latest move succeed given its poor track record so far? Pat comes the answer from Manley: “I am certain this would not be a false start.”

First Published: Fri, December 07 2012. 00:00 IST