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Fiat India starts long, uphill drive

After parting ways with homegrown Tata Motors four months ago, Italian car major Fiat is banking on a refurbished distribution network to script a turnaround in a market where it has been steadily losing ground.

autos Updated: Sep 20, 2012 13:00 IST
HT Correspondent

After parting ways with homegrown Tata Motors four months ago, Italian car major Fiat is banking on a refurbished distribution network to script a turnaround in a market where it has been steadily losing ground.

Fiat was one of the first foreign car companies to come to India, but has lagged industry growth over the last few years and has a marketshare of less than 1%, while relatively new entrants like Renault, Nissan, Volkswagen and Skoda have marched way ahead.

“We have a plan to script a revival and setting up our own dealer and service network is a big part of that,” said Ravi G Bhatia, vice-president (commercial), Fiat India Automobiles Ltd. “Our global marketshare is 4.1% but in India it is a mere 0.6% or so. We have to bridge the gap but it will not happen overnight.”

Fiat had formed a joint venture with Tata Motors in 2008 to manufacture, sell and service their vehicles together. The two companies have 167 joint dealerships around the country that will continue to sell and service Fiat cars till March 2013.
The company plans to have set up at least 80 independent dealerships by then, covering 67 cities. Another 59 cities would be covered by the end of 2013.

The interim period, however, poses fresh challenges. Fiat’s India sales have dropped almost http://www.hindustantimes.com/Images/popup/2012/9/20_09_12-buss21c.jpg50% so far this fiscal, at a time when the market has grown by a meagre 1%. Last month, only 472 cars were sold — its lowest monthly tally since plumbing the depths in December 2010 with 275 units sold.

“There are headwinds right now as customers are waiting for our network to settle down,” Bhatia admitted. “There is no doubt though that we have the right products in two of the fastest growing segments (the Linea and the Punto). We are already an emotional brand but not a functional one. It is not going to be easy, but that is the challenge.”

After two failed attempts at joint ventures — with the Pune based Doshis and Tata Motors — and a previous unsuccessful solo journey behind it, the company, which owns marquee brand Ferrari, is hoping that fourth time proves lucky for it.