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Fiat currently in wait and watch mode in India

With no new products to offer until 2017, co looks to consolidate its business and focus on positioning its Jeep brand

Swaraj Baggonkar  |  Mumbai 

The Jeep Wrangler on display at Auto Expo 2016, New Delhi
The Jeep Wrangler on display at Auto Expo 2016, New Delhi

Last calendar year, German car maker Mercedes-Benz had a record breaking time with sales jumping 32%, closing the year at the numero uno position with 13,502 units.

During the same year, Italian car maker saw sales of 8,575 units, lower by 37% compared to Mercedes though the Italian company's average ticket price was nearly ten times smaller than the German giant while having a wider retail reach.

But it is not just sales numbers alone. is presently without a dealership in Mumbai as all the three former dealers closed operations. Ironically Fiat's India headquarters is based in this city.

While other competing brands like Maruti Suzuki and Hyundai have made series of launches, has not had an all-new model launch since October 2014, which is when it launched the Avventura (based on the Punto hatchback).

A few of its dealers have taken Fiat to court over unfulfilled promises about introducing the US-based Chrysler brand in India. Fiat promised dealers to launch Chrysler products under the Jeep brand in mid-2013, but those plans remained fruitless.

“We invested in new showrooms for Chrysler, but we had to switch to Fiat because Chrysler was not available. That business (however) was impossible to sustain. With sales of five models or even less in a month there was no way we were ever going to make money. We were forced to shut down”, said a former Fiat dealer.

Despite being among the earliest to enter India, well before Suzuki Motor Corporation's entry in 1983, Fiat has struggled to deliver. Its current India line-up has only four models one of which is a premium fully-imported model. Because of a very limited product line-up, Fiat is absent in some of the crucial volume-pushing segments like the economy hatchback or compact sports utility vehicle segment.

“The one reaction that we get from people in India is that, 'I am not sure if you are going to stay in India'. There is this constant thing of us being in and out (of the market),” Kevin Flynn, president and managing director, Fiat Chrysler India said in an interview to Business Standard.

Flynn is referring to Fiat's forgettable record in India. With two failed joint ventures (the latest with Tata Motors) the company has had a very unpleasant past even as other examples like German giant Volkswagen and French brand Renault has raced ahead despite entering the market less a decade ago.

According to data shared by the Society of Indian Automobile Manufacturers (SIAM), Fiat sold 7,001 units in the ten months of April-January, reporting a fall of 23% and a market share of 0.3%.

The Turnaround

Earlier this month, Fiat finally announced the much-awaited entry of Chrysler. Though three years behind schedule, Fiat is confident that the company can get back on its feet riding with the success of the Jeep.

Jeep is one of world's oldest US-based SUV making brand, in the same league as Tata Motors-owned Land Rover, the British company that makes all-terrain SUVs.

Later this year, Fiat will embark on a brand enhancement program for the Jeep where it aims to highlight that Jeep is not a generic term but a brand that belongs to Fiat Chrysler. This, it hopes, will help it relate directly to the consumer and reinforce their confidence in the brand.

“In India, some people use Jeep as a term to define the whole segment. It is our name and we will stake claim to it now that we are in India,” Flynn added.

Jeep, which is a 75-year-old brand, will commercially launch the Wrangler, Cherokee and Cherokee SRT in the coming months, all of which will be imported into India. Further, joint promotion of the two brands is not ruled out by Fiat either.

“We will unveil our new model strategy in due course. We are not working in a box with the light turned off. We understand what's going on in the market around us”, Flynn added.

According to sources, Fiat does not have any all-new products to offer until 2017. It will consolidate its business and focus on the Jeep brand until then. But simultaneously it will work on its own new range that will include products in the compact SUV, compact sedan and multi-purpose vehicle segments.

“We understand what are segments look like and we can do better in them. And what our strategy needs to consider, what we want to be and which segments. Nothing is off the table and we know where our strengths are.”

Challenges

The most challenging task for Fiat will be to keep the dealer partners interested. It presently has just over 100 dealerships across the country while Mercedes-Benz has 83 dealerships and Maruti Suzuki has more than 1,000 dealerships.

“I have no plans to reinvest in a Fiat dealership at the moment or in future. We faced some severe challenging times”, said the dealer quoted above.

When asked why Fiat does not have even one dealers in Mumbai, Flynn added, “We are aware that we do not have a dealership in Mumbai right now, but that will not be the case for long we will be making an announcement in this regard shortly.”

First Published: Thu, February 25 2016. 09:33 IST
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