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    Thread: Go specialist and go alone, that's the new mantra of Fiat for India.

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      Go specialist and go alone, that's the new mantra of Fiat for India.

      Fiat bets on SUVs and sporty cars in India reboot

      (Reuters) - Go specialist and go alone. That's Fiat's new mantra for India as the Italian carmaker tries, once again, to crack the world's seventh-largest car market.

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      Fiat, one of the first Western carmakers to enter India but now the worst performing, opens a new, fully-owned 57-dealer network on April 1, hoping to attract more of the 1.2 billion people in the world's second most populous country.

      Rather than launch a new model in the cheap, small car segment that dominates India and is ruled by Hyundai and Maruti Suzuki, Fiat plans to tap into fast-growing areas like sports utility vehicles (SUVs) and sporty cars.

      It will bring its Chrysler Jeep SUV to the country this year and build a small version of the car there by 2015, as well as take aim at the higher end of the market with Abarth, the sports version of its 500 and Punto models.

      Analysts think it will be a challenge, but could work.

      "I think Fiat's focus is on launching a couple of niche products and rebuilding the customer experience," said Deepesh Rathore, Managing Director of IHS Automotive India. "It's painful but it's the time to tell the customer that Fiat is different from the image he or she has had in mind."

      Fiat agreed in 2007 to build and sell cars with India's Tata Motors as foreign automakers began piling into the fast-growing market. But after three years of falling sales at dealers where Fiat's cars were displayed along the lower-priced Tata competitors, the Italian company decided in May 2012 to cut its distribution agreement with its Indian partner.

      A reboot is certainly in order. While Fiat's 1.3 litre MultiJet diesel engine is under the hood of 75 percent of India's small cars, the automaker sold just 203 Fiat-branded autos in February, the worst of any major brand, and its market share has dwindled to a mere 0.3 percent this fiscal year.

      "We all believe that we have scratched the bottom of the barrel," Enrico Atanasio, managing director of Fiat India told Reuters. "(Our performance) is not what the brand deserves."

      Now is not a great time for a relaunch. Car sales in India are set to fall this financial year for the first time in a decade, hurt by high interest rates and slowing economic growth.

      Yet the potential is there. LMC Automotive expects India's car market, currently around 2.6 million vehicles, to grow to about 6.9 million in 2017. That's around half its forecast for western Europe, although well below its projections of 16.9 million for the United States and 31.5 million for China.

      "India is a small, low-margin market for Western auto makers ... there is no indication of a near-term earnings upside," said Phillip Houchois, auto analyst at UBS.

      "But if you think India will one day be like China, it's nice to be able to put down roots there."

      With enthusiastic new dealers, Atanasio believes Fiat can end 2013 with 1 percent of the market and aim for 5 percent longer term. It plans to exit the year with 112 dealers, versus the 170 it had with Tata, and will continue to build engines and cars locally with the Indian company.


      MINI JEEP, LOCAL TWEAKS


      A boxy Fiat sedan, built by Premier Automobiles from 1964 as the Fiat 1100 Delight, is a familiar sight in Mumbai where many still ply roads as Premier Padmini taxis. But more recently, its Punto hatchback and Linea sedan have not caught on.

      Fiat simply did not get the product offering right, Fiat Chief Executive Sergio Marchionne admitted earlier this month.

      Fixing it means introducing the Jeep Cherokee and Wrangler models this year, to grab a piece of India's booming SUV market, which LMC Automotive sees reaching more than 1 million by 2019 from just 363,000 last year.

      Fiat also plans in 2015 to begin production in India of a new mini-SUV Jeep currently under development, which will be sold locally and also exported to other markets, Atanasio said.

      Fiat took control of Chrysler in 2009, and has slowly been adding the U.S. carmaker's brands to its stable worldwide. In all, Fiat-Chrysler plans to launch nine new or refreshed models in India in the coming years, Atanasio said. Recently, India was the only place where Fiat was selling just one brand.

      It will not, however, launch a new model in the low-priced small car segment which accounts for around 70 percent of sales in India as middle class families trade in their motorcycles for four-wheeled status symbols.

      Instead, it will modify the models it does sell in India to suit local conditions, like the Linea sedan, built with a higher ground clearance for India's pot-holed roads.

      "Fiat will have to get its pricing and marketing strategy right for this model (segment) if its wants to be successful in India," said Ammar Master of LMC Automotive in Bangkok.

      (Editing by Mark Potter)

      http://in.reuters.com/article/2013/0...92Q01720130327
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      Quote Originally Posted by Ironhide View Post
      opens a new, fully-owned 57-dealer network on April 1, hoping to attract more of the 1.2 billion people in the world's second most populous country.
      Aameen

      Quote Originally Posted by Ironhide View Post
      It will bring its Chrysler Jeep SUV to the country this year
      Not sure if Fiat really thinks that its going to be a game changer for them? I wish them all the best and really wish Fiat's success.

      Quote Originally Posted by Ironhide View Post
      "I think Fiat's focus is on launching a couple of niche products
      IMO Fiat should focus on launching products those appeals to masses to increase volumes.

      Anyways, good to see this. Atleast, I am assured that Fiat is here to stay else looking at their monthly sales figure one can easily make out that Fiat is going out soon...
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      whatever they might plan. Price for their cars is very important if they have to survive.
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      Quote Originally Posted by gonugupta View Post
      I am assured that Fiat is here to stay else looking at their monthly sales figure one can easily make out that Fiat is going out soon...
      +1 , Happy to see, that they still have confidence in the Indian market, where lot of other manufactures have given up before even entering into the market.
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      Quote Originally Posted by shishirbn View Post
      whatever they might plan. Price for their cars is very important if they have to survive.
      Punto and Linea are very well priced given the technology and features. Hope they maintain the prices and don't go overboard.
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      I don't think that this time they are gonna leave india like before. After 1 April things will be changing for sure they actually can't reveal their cars now due to tie-up with tata but after they'll definitely come up with aggressive strategy. These things were made clear by one of the officials in 17th feb's fiat mega meet at Delhi/ncr.
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      Quote Originally Posted by Ironhide View Post
      It will bring its Chrysler Jeep SUV to the country this year and build a small version of the car there by 2015, as well as take aim at the higher end of the market with Abarth, the sports version of its 500 and Punto models.
      I am particularly interested in Abarth , I they price it this side of 12 Lakhs ( As per media reports ), I am game for it . Other thing they should do is to introduce T-Jet in India for Punto .

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      Quote Originally Posted by Ironhide View Post
      It plans to exit the year with 112 dealers, versus the 170 it had with Tata, and will continue to build engines and cars locally with the Indian company.
      Aggressive number!! Give then low volume of FIAT I doubt many would come forward to open a dealership given the initial high cost

      Quote Originally Posted by Ironhide View Post
      Fixing it means introducing the Jeep Cherokee and Wrangler models this year, to grab a piece of India's booming SUV market, which LMC Automotive sees reaching more than 1 million by 2019 from just 363,000 last year.
      A top down approach will work any day, but I highly doubt whether this approach would work. When their volume maker is unable to make any volume then what is the point in jumping in to niche market? First built the brand and then bring confidence in people on the brand then spread wings.
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      Quote Originally Posted by camchennai View Post
      built the brand and then bring confidence in people on the brand then spread wings
      I agree with you and I think FIAT has begun taking actions in that direction. Setting up the service centers followed by good service quality (necessary!) will bolster the faith.
      People buy a Maruti for its service, Hyundai for its bells & whistles, discard Ford & Fiat completely, buy a Polo for VW/German pedigree despite a 3-cylinder engine (yes it happens, talking about tier-2,3 cities).
      IMO, FIAT should focus on having a mass product (75/90 BHP Punto, maybe another offering in a lower segment) while introducing a Niche Product like Punto Abarth for the enthusiast with deeper pockets. Customization should be offered on such cars and this would drive the demand. With all the special editions mostly focused on decals, ICE etc. without any performance improvements till now, this would (a) Bring something new to the consumer (b) Force other car makers to introduce competing products & upgrades.
      Last edited by Devil_in_Disguise; 27th Mar 2013 at 17:20.

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      Quote Originally Posted by camchennai View Post
      When their volume maker is unable to make any volume then what is the point in jumping in to niche market? First built the brand and then bring confidence in people on the brand then spread wings
      very true. Infact Fiat did launch products like Palio 1.6, 1.9 D, Tjet for niche market but could not succeed due to branding and lack of confidence in buyers. I afraid if Abarth would meet same fate as T-Jet...
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