Fiat's decline is all the more stark when contrasted with the performance of premium car maker Mercedes Benz whose cars are priced nearly ten times higher. For the calendar year 2015, Mercedes-Benz's sales jumped 32 per cent; it closed the year with 13,502 units. Fiat sold 8,575 units, 37 per cent lower than Mercedes. How did Fiat, despite having entered the market early drive itself into near oblivion?
Falling off the map
Fiat, for the past decade or so, has steered its way around the country with a shaky hand. Its plans have been chopped, changed, shelved and recalibrated numerous times. While competitors such as Maruti Suzuki and Hyundai have launched several new models, Fiat has not had an all-new model launch since October 2014, which is when it launched the Avventura (styled on its Punto hatchback).
It has also run afoul of its dealers. A few have taken Fiat to court over unfulfilled promises. Fiat had promised to launch Jeep, as part of its venture with American auto maker Chrysler in mid-2013 but, the car is still to come to India. "We invested in new showrooms for Chrysler but had to switch to Fiat because Chrysler was not available. That business (however) was impossible to sustain. With sales of five models or even less in a month there was no way we were ever going to make money. We were forced to shut down", said a former Fiat dealer.
Fiat's current India line-up has only four models, one of which is a premium fully imported model. But it is absent in some of the crucial volume-pushing segments like the economy hatchback or compact sports utility vehicle segments. Earlier this month, three years behind schedule, Fiat finally announced it would bring Jeep into India. One of world's oldest US-based SUV brands, the company expects Jeep to give it a much needed boost. "We will unveil our new model strategy in due course. We are not working in a box with the light turned off. We understand what's going on in the market around us", Flynn added.
Reconnecting with the customer
Fiat is getting ready for an aggressive campaign. It wants to emphasise the brand's history in the country and how Jeep is a giant in its category. "In India, some people use Jeep as a term to define the whole segment. It is our name and we will stake claim to it now that we are in India," Flynn added. Jeep, which is a 75 year old brand, will commercially launch the Wrangler, Cherokee and Cherokee SRT in the coming months, all of which will be imported into India.
According to sources Fiat does not have any new products to offer until 2017. It will consolidate its business and focus on the Jeep brand until then. It is working on its own new range that will include models in the compact SUV, compact sedan and multi-purpose vehicle segments. "We understand what these segments look like and we can do better in them. Nothing is off the table and we know where our strengths are".
Fiat, however, has a big battle ahead with its dealers. It presently has just over 100 dealerships across the country while Mercedes-Benz has 83 and Maruti Suzuki, more than 1000. Most dealers are not keen to renew their relationship with Fiat because as one dealer said, they have faced some challenging times. Flynn however is not letting that get in the way of his optimism. He said, "We are aware that we do not have a dealership in Mumbai right now but that will not be the case for long."
BUMP IN THE ROAD
Fiat set up shop in 1950, tied up with Premier Automobiles, but the alliance came apart in 2001
Teamed up with Tata Motors (for sales and marketing) in 2006, split in 2012
Sales have consistently fallen; 7,001 units sold between April 2015 to January 2016- 23% lower than the previous period
It has four models in the country, competitors Volkswagen and Renault have 6 and 7 respectively
To launch Jeep soon, its price yet to be disclosed but will compete with Audi Q3 (Rs 29 lakh) and BMW X3 (Rs 23 lakh)