Fiat, the Italian automotive maker, witnessed a 50 per cent drop in the sales of its products in the Indian passenger car market. According to the data compiled by apex body Society of Indian Automobile Manufacturers (SIAM), the company recorded average sales of 1,800 vehicles per month in 2010-11 while its sales dipped to 900 units per month in the period between April and July of the current fiscal.
Fiat India had a 50-50 Joint Venture (JV) with Tata Motors but both the companies parted ways in May 2012. Accordingly, post the split, the Italian auto maker took control of the distribution and marketing of its products in the domestic market but the recent gloom has resulted in slack demands for its vehicles among the Indian car enthusiasts.
Post the breakup, the company was re-christened as Fiat Group Automobiles India (FGAI) but failed to entice Indian audience due to its small product portfolio and shortage of dealers in the country.
Commenting on the company's strategy for Indian passenger car market, an official FGAI spokesperson said, “We have received a very positive response from existing Tata Fiat dealers and new entrepreneurs. There is a lead time for construction and activation of new physical facilities, typically four to six months, depending on whether the facility is a partially-ready building or a greenfield facility. We are very confident of meeting our announced targets for 2012 and 2013.”
The company opened its first exclusive showroom in Hyderabad in May 2012 but since then no new facility from the Italian auto maker's stable saw the day light. Consequently, the Indian buyers have lost interest in the brand with too few offerings in the market. Currently, FGAI has only models in Indian market – Linea sedan and Grande Punto hatch, which are considered premium offerings in their respective segment. The Linea sedan and Grande Punto hatchback are priced at Rs. 7.13 lacs and Rs. 5.06 lacs (ex-showroom Mumbai), respectively.
Reportedly, FGAI is working towards opening 20 new showrooms spread across the country by the end of 2012. Further, the company seems upbeat on its future plans of collaborating with 80-100 dealerships in the next 14 months.
Expressing his views on the Fiat brand, V G Ramakrishnan, Senior Director, Automotive, Frost and Sullivan, said, “Fiat products never got their due. The failure of Fiat has more to do with the marketing strategy they adopted, than anything else. Joint dealerships are very common in western markets, but India is a very different place. In addition, below-par servicing for Fiat cars hit its brand image.”
Fiat is well established and renowned worldwide as an excellent auto maker. The Indian scene may not contribute much to its global sales but it seems like the company is starting to take the domestic market seriously. Industry experts believe that in order to cement its position in the Indian passenger car market, FGAI will have to augment its sales and service channels throughout country to gain the trust of the domestic car buyers. The Indian buyers will reciprocate definitely, given the great build and design attributes of Fiat products.
