Petrolhead Alert – Fiat India all set for a comeback

Posted on: Mar 29, 2013 - 10:49am IST

2012 Fiat Punto Sport frontVery few people can understand why petrolheads in India love Fiat cars. It can’t be explained and I am not going to try to as well.

India’s love affair with Fiat started way early in 1964 when the Premier Padmini (essentially a Fiat 1100D) was launched. The Premier Padmini was manufactured by Premier Automobiles under a licensing agreement with Fiat. Fiat officially entered India in 1997 in a joint venture with Tata Motors.

While the Indian auto market has gone from strength-to-strength since 1997, Fiat India has weakened over the years. It is indeed sad to know that one of the early western carmakers to enter India has completely missed the auto boom.

Lack of the right products, irrational pricing, very limited distribution network, headquarters’ ignorance are some of the key reasons why Fiat India failed to crack the seventh largest auto market in the world.

However, Fiat India has finally realized the depth of its mistake and is ready to gets things right. Here are a few steps that Fiat India is taking to achieve 5 percent market share in 2016 –

  • Go Alone

Fiat has learnt from its past very well. Twice, the Italian brand has suffered quite badly in the hands of Indian partners. Now, Fiat has decided to play its India innings alone. Effective from April 1, 2013, Fiat will have its own fully-owned 57-dealer network.

  • Find your niche

In the world full of choices, it is becoming increasingly difficult for manufacturers to sell their products. The right way to do it is to find your own niche.

Fiat India has realized that its niche are petrolheads like us. According to company’s research, 24% of Indian car buyers are thorough petrolheads and that’s Fiat India’s target market. Fiat is re-directing its marketing activities to center around car-loving people.

  • Focus of distribution

Fiat India is in the process of expanding its own dealership network by appointing 110 new dealers by end of June 2013. The dealership count should reach 170 dealers by the end of December 2013. Fiat will also introduce new Fiat Cafes to improve the selling experience of Fiat cars.

  • Brands, brands and more brands

Right now, Fiat’s India presence is restricted to the Grande Punto and the Linea. Clearly, to achieve a 5% market share Fiat would require more firepower. Fiat will expand its India footprint to include multiple brands such as Jeep, Abarth and Mopar

  • Focus on the right products   

In order to be successful in India, you need a small car in your portfolio. The top three makers in India – Maruti Suzuki, Hyundai and Tata Motors have multiple small cars in their portfolio. However, Fiat has decided that it wants to focus only on high growing segments in India.

It is a very bold decision on part of Fiat India and quite a sensible one as well. The small car segment has been gradually losing steam over the years. Right now, it is an extremely saturated segment with more than 10 products fighting for a diminishing market.

Fiat India will launch nine new models in the country in the next three years. These would include all-new Linea and Punto, re-positioning of existing Linea, a B segment SUV and four products from the Jeep brand to tap the burgeoning SUV market.

These products will be highly localized and will be built at the Ranjangaon plant.

  • Taping the CV market

Fiat is currently conducting a market study to launch the Fiat Professional brand of utility/passenger vans and small pick-up trucks.

  • Focusing on Exports

Successful automakers in India such as Maruti Suzuki, Hyundai, Ford and Nissan have managed to be in black in a tanking market by focusing on exports. Fiat has decided to make the Ranjangaon plant its global export hub.

The automaker has constructed a stockyard facility at Ranjangaon to hold up to 2000 cars. It is spread across an area of 12 acres within the Ranjangaon Industrial premises and is in close proximity to FIAT’s manufacturing plant. Fiat India plans to export cars to RHD markets such as UK, Japan and Australia.

While most steps seem to be taken in the right direction, the bigger question is – ‘Is the timing right?’

India’s auto industry is facing its worst slump in 12 years. Most automakers (even the successful ones) have resorted to aggressive discounting to clear stock. Customers are delaying their decision to buy new cars due to high interest rates and slowing economy.

So is Fiat India doing too little, too late?

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7 thoughts on “Petrolhead Alert – Fiat India all set for a comeback

  1. Sridhar says:

    “Right now, it is an extremely saturated segment with more than 10 products fighting for a diminishing market.” I don’t have numbers, but are you very sure of this? Most of the cars sold are still the entry-level ones, right?

    Reply
  2. sandy says:

    Yes, of-course. Fiat is doing too little, too late. They have not yet improved the built quality, plastic quality and dual tone black-beige interior(something that Etios did much earlier).
    They made Indians addicted to their Multijets, yet they suffered the most.
    By that time, they should have launched their twin cylinder MultiAir petrol engine, as their current 1.2 Fire stands no chance against iVtec, K-Series, Kappa or upcoming EcoBoost.

    Reply
    1. Vivek says:

      @sandy, Most people that talk about cars seem to have very little understanding of them. Have you ever owned or driven a Fiat over an extended period of time besides a maybe a test drive? Armchair critics are plenty and don’t understand what its about a Fiat that is different. The quality of plastics on a Fiat are no worse than your Maruti or Hundai I will admit that VW and Honda are slightly better with respect to plastic quality but you need to drive a Fiat to know why they are special in this segment, your Vernas and its like that boast of superior power output simply dont stand a chance at speed with the likes of the Linea or Punto simply because of the mind blowing high speed handling. The way a Linea holds its line at speed around the twisties will just have you forget any of the not so important details. The Italians also know their design like few others do, compared to the garish loud and cheap looking Koreans out there or the boring German & Japanese designs, and lets not even discuss the American ones shall we? But well I suppose these are not important to the mainstream…so well carry on!
      Ps: I do own a Fiat Linea, and yes It did come with two tone interiors from day one.I got my Linea in August 2009… Wait did you say you something about the Etios and its two tone interiors? wonder if you had access to a pre production oH wait a virtual concept?…Not that I could care anyway.

      Reply
    2. sandy says:

      @Vivek, u r as honest as your Fiat; as you had admitted that VW n Honda does have better plastic quality and built quality then Fiat and thats what I was pointing out. Fiat is as prestigious brand as VW n Honda; but more legendary, they are among the most honest car makers. They make cars of better design, better engineered be it the chassis, the engine, the durability; but how could they miss this minor thing. Grande Punto at European market does have dual tone interior as your Linea, but we don’t. And where is their popular TwinCylinderMultiAir petrol engine? Since our market is getting addicted to mini SUV, where is their popular Panda?

      Reply
  3. Tijo Joy says:

    Hope they learned the lesson from Yamaha India!! Seems all the right steps & everything depends on what they offer as new products too

    Reply
  4. Pradyuman says:

    I think there is nothing to loose for Fiat in India from current position. Whatever they’ll achieve will be pure gain.

    Every Auto company in India followed Top-Down strategy in past and now almost every one is fighting hard in economy products. Currently India is not having any Mid-Luxury kind of brand. India used to have two in past. HONDA – lost its faith in Indian mid-luxury market & currently trying hard in economy range. SKODA – The dream diesel mid-luxury brand of India. VW killed this brand to make VW more prestigious then SKODA. Now situation is VW wants volume hence launching economy products & SKODA being lower brand than VW have no choice other than following its trimmed down models.

    Because of stiff competition FIAT will never be able to get volumes in economy segment. It’s a chance for FIAT to fill gap of mid-luxury segment in India.

    Hoping best for FIAT!!!

    Reply

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About the Author
Kaustubh
Kaustubh Shinde

They say sooner or later your passion finds you. Sometime in late 2009, I started writing for IAB and ever since then it has been a roller coaster ride for me. An amazing experience that has taught me a lot, taken me to new places, driven some great cars and met some amazing people. When you don't find me on IAB (very rarely), you will find me either at a coffee shop or an eatery or at the nearest gadget store.Hope you enjoy IAB as much as we do!