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Fiat scripts a third comeback

Source : BUSINESS_STANDARD
Last Updated: Fri, Dec 07, 2012 07:40 hrs

pTwo failed alliances in the past 10 years in India would have been enough for any automobile giant to call it quits Not Fiat The Italian giant is in fact busy scripting a fresh comeback with a series of launchesppOne reason for this is the Rs 15000 crore investment the Italian company has already made in the country even though that hasn&rsquot 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 5285 units Fiat remains the smallest volume car maker in India even though it was one of the first to step into the countryppThe 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 &ldquoforeseeable future&rdquo from a tiny 07 per cent last yearppOver the next four years Fiat will launch as many as 12 models including five brand new products The rest will be &ldquorefreshments&rdquo 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 marketing and sales partnership with Tata MotorsppThe partnership under which Tata Motors dealers sold Fiat cars ended earlier this year with Fiat deciding to set up its own line of exclusive dealershipsppThe flurry of launches will begin with Jeep the world&rsquos largest selling American sports utility vehicle brand set to be launched next year Seeing the increasing tilt towards SUVs in India Fiat is keen to tap the demand with the launch of the Wrangler and the Grand Cherokee under the Jeep brand in India through the fully imported routeppThree 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&rsquos Duster Mahindra Scorpio Mahindra XUV500 and Safari Storme to name a fewppClassified as the B SUV by the company Mahindra Scorpio Renault Duster segment Fiat 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 themppThey will be produced at the Ranjangaon facility near Pune which is owned by the 5050 Tata Motors-Fiat joint venture company Fiat India Automobiles FIAPL Some of the engines for the Jeep will be shared with Fiat Punto and Tata Indica Vista and be made at the same plantppThese 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 Fiat to compete aggressively with local playersppFurther a mini SUV under the Fiat 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 lakhppFurther Abarth the Italian racing specialist owned by Fiat will also make its way to the country &lsquoAbarth&rsquo versions which have higher power output and superior driveability may be seen in the Fiat 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 productsppFurther 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 &lsquospecial model&rsquo of both the models will also debut in the ensuing year A Linea Classic will drive in around 2013-14ppMike Manley president and chief executive &ndash Jeep and chief operating officer for Asia -Fiat says &ldquoAsia 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&rdquoppFiat is expecting the Indian automotive market to post a compounded annual growth rate of 92 per cent by 2016 by when the yearly volumes will reach 37 million units from 26 million units per annum presently This growth is one of the biggest in the worldppThe 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 Fiat group Fiat 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 modelsppBesides product launches Fiat 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 centerppIt is also launching Mopar in India which will take care of all the component needs of the Fiat 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 Fiat branded outlets or have independent showroomsppBut will the latest move succeed given its poor track record so far Pat comes the answer from Manley &ldquoI am certain this would not be a false start&rdquop

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