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Fiat wobbles amid India boom

While most domestic carmakers are scaling new peaks in sales and facing aggressive demand, Fiat India is down in the dumps. The Italian company is the only one whose sales have fallen in the first six months of 2010-11.

autos Updated: Oct 18, 2010 01:24 IST
Sumant Banerji

While most domestic carmakers are scaling new peaks in sales and facing aggressive demand, Fiat India is down in the dumps. The Italian company is the only one whose sales have fallen in the first six months of 2010-11.

Riding on the Punto and the Linea, launched a year ago, it had appeared as though Fiat would post its first quarterly profit in over four years, in the April-June quarter. However, as the numbers now suggest, both these cars — which helped the company bounce back in Europe, are losing steam in India.

Between April and September this year, Fiat’s sales have declined by 8 per cent to 11,863 units against 12,893 units sold in the same period last year. Domestic passenger car sales however, zoomed 33.6 per cent to 9.2 lakh units in the first six months this year.

So where has Fiat gone wrong?

"It is a classic case of how you falter with a winning product," said an auto analyst on condition of anonymity. "This is a celebrated carmaker that has been in India for ages. They also have very good products but somehow manage to make a mess of it. First, it was the Uno and Siena then came the Palio and now the Linea and Punto."

Fiat India did not respond to questions from Hindustan Times sent 10 days ago, seeking its views on the downturn.

A common explanation for its slump is a big gap in after-sales service in which it has changed tack from being on its own to switching partners, from the Doshi group to the Tatas.

Customers seem to be finding service gaps linked to the issues.

Software industry executive KV Subrahmanyam said his Linea’s air conditioning unit developed problems, and that Tata Motors, its service agency, attributed it to design problems over which it had no control.

"The design issues have been acknowledged by the Fiat showroom and has been referred to Tata motors in Pune," Subrahmanyam said. "My neighbour too bought a Linea in January, and has reported same issues."

Fiat slump