MUMBAI – Fiat India has lost a lot of ground in India, but the automaker hasn’t given up on a market where it’s been present for more than 80 years.
Fiat India Automobiles, whose name omits Chrysler despite the merger of the Italian and U.S. automakers, offers only about 35 variants of six models – none of them in the growing SUV segment. There are no plans for any new models.
Demand for affordable automated manual transmissions also is growing, but Fiat offers automated manuals in only one model, the Abarth 595 Competizione.
As a result, Fiat’s product lineup puts the automaker near the bottom of a list of more than 35 companies that offer nearly 800 variants of their models in India.
For the past six years Fiat has hemorrhaged sales and brand equity in a highly competitive market despite a few world-class products led by Jeep, contemporary technology and its lengthy association with India.
Selling Jeep Wrangler and Grand Cherokee models in greater volumes could help improve Fiat’s position in the compact-hatch and even the compact-sedan markets. But the automaker instead is importing higher-end Jeeps at prices ranging from Rs7.5 million-Rs9.5 million ($112,300-$142,300) and even models costing Rs13 million ($195,000).
Those prices include a 180% duty as they are imported as fully assembled vehicles but do not include taxes and transportation costs.
While the Jeeps are generating excitement, no one knows how they will sell at these prices to sustain Fiat in India.
As for its own models, Fiat has been making minor changes to nameplates such as Abarth, Avventura and Punto and marketing them as separate models.
For example, the Fiat website advertises four Avventura models – three of them with identical 1.3L diesel engines and all four difficult to identify as separate vehicles, although each is priced differently.
Sales on Steady Downward Slide Since 2009
WardsAuto data shows Fiat sales peaked at 22,757 in 2009 before falling to 7,926 in 2015, down 30.8% from prior-year. The decline is continuing this year. Following the pattern of declining sales, the brand today has half the 150-plus dealerships it had in 2009.
Kevin Flynn was sent to India in May 2015 as the Fiat subsidiary’s president and managing director. He has new ideas about repositioning the brand here as he seeks to reach out to consumers and rekindle their trust.
“It is a bit daft that a car company of our size hasn’t made the inroads that it should,” Flynn admits. “The challenge we have is how to make ourselves resonate again with the Indian buyer.”
While sales results indicate otherwise, Flynn believes Fiat is redeveloping a foundation that will strengthen its future in India.
“Kevin is a strong, strategic and dynamic leader with the ability to shape the Fiat brand, business and culture,” a company source says.
In a step toward the changeover, Fiat recently opened its first Fiat Chrysler dealer outlet in Mumbai, India’s largest city, for the Jeep brand.
About 10 new outlets in major cities will carry the Fiat Chrysler name and will sell both Fiat and Chrysler brands. In the rest of the country, dealerships will use just the Fiat name and sell only Fiats.
The Fiat brand has been known throughout India for some 80 years. In 1995, it planned to make the global Uno notchback in India jointly with Premiere Automobiles and got 290,000 fully paid advance bookings.
But only a few Unos were produced and deposits had to be refunded to customers. The damage eventually forced Premiere to leave the business, while Fiat hesitantly held on despite its global prestige and capabilities.
The Ranjangaon plant is owned jointly by Fiat and the automotive branch of Indian conglomerate Tata. Fiat plans to use it to locally manufacture Chrysler and Jeep models, but it already is a money-loser. Tata invested more than Rs16 billion ($240 million), but its net worth last year was assessed at less than Rs12 billion ($180 million). Tata might hesitate to make further investments, and Fiat may have to go it alone.
It remains to be seen how Jeep models will fare in the future and change Fiat’s perception in India as a high-risk, low-profit business.
