FIAT-The Curious Case In India !
FIAT is the 6th largest car maker in the world.Its based in Italy.Its a brand that is well known around the world.Its present in many countries including India.
FIAT has had a very strange relationship with India.We all do remember the Premier Padmini which was on roads till 2000.Even today majority of the TAXI’s in Mumbai are Padmini.
Premier Padmini is a word that sounds a little lesser known and lesser recognized.Many would think,Which Padmini,Which premier car is he talking about ? Now when i say majority of the TAXIs in Mumbai are FIATs it makes a lot more sense.
Both sentences are somewhat true.In India,a company named Premier Automobiles Limited(PAL) started making a version of FIAT cars in India.In 1951, they began producing versions of the Fiat 500 for the Indian market. This was followed by the Fiat 1100 in 1954. In 1973, the Premier name was used on their vehicles for the first time, the Premier President, based on the Fiat 1100 as Premier Padmini. In 1978, they launched the Fiat 124-based Premier 118 and 138D models.Over the years,Premier Padmini could not establish its brand and the car was always referred to as FIAT in public.Decades went by but the name and main design of the car didn’t change at all. For decades ,the car came to be known by FIAT and just FIAT.Many people knew that this infact is padmini made by an Indian company on some FIAT’s design.But in Pre-Liberalized India,this was the king.
I even found a print ad of Premier Padmini.
Things changed when FIAT actually came to India post liberalization,They entered India with FIAT UNO in 1996 with PAL as partners but things didn’t work out as PAL delivered just 617 cars out of 30000 ordered.Then in 1997 they again launched it with a JV with TATA Motors.
The problem with FIAT was that the image that people had of FIAT was the Premier Padmini.That image refused to go away.I remember when i was a kid even i used to think that way.
FIAT tried hard in Indian markets,but Indians had moved on with Maruti and were apprehensive about FIAT and its image of the old FIAT 1100 (the 19 50′s Italian model which we see even today on Indian roads).
Even then UNO picked up well.The Uno was initially a success in India, but then it faded badly due to poor dealer support.
Here comes the reason where the case becomes a lot more curious.
One of my friends went to a TATA Showroom to enquire about Punto.After some talk about FIAT cars,the salesman suggested him TATA Safari and Indigo instead.FIAT and TATA Motors have common showrooms at major places.So this is a problem,a big one.
In India FIAT has two major problems
1) The old brand image made by Premier Padmini is still stuck in the mind of people.
2) Problem with partners at the actual touch point and service centers.
The first point is fading with cars like Punto,Linea coming out of FIAT Stable,but what about point number 2.This reason is actually acting against FIAT and many consumers are shying away from FIAT due to it.
Now FIAT is totally dependent on TATA for Sales ,Service and Spares.This is a point where FIAT needs to more inclusive.They cant allow this to be their weak point in India.
There are 11 companies in India in passenger car segment.With Maruti having 60% of market share,things are tough for the other 10 companies.
Things are improving for FIAT as the sales are improving for them but the above two points really need to be sorted out.
What Say ?
UPDATE : The Premier in the above post has recently come in news for their new SUV.Premier RIO is the name of the SUV.
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FIAT-The Curious Case in India !…
FIAT has had a very strange relationship with India.We all do remember the Premier Padmini which was on roads till 2000.Even today majority of the TAXI’s in Mumbai are Padmini.
Premier Padmini is a word that sounds a little lesser known and lesser r…
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Fiat has excellent quality, rather i say Tata do not even worth competing.. I still wonder wot is fiat doing!? Are they again trying to make profits by selling cars and then ‘pack n move’ again!? I was considering Punto, but the infrastructure & service quality of Tata changed my mind..
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Well analysed and nicely written
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Thanks Sir !
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Considering the numbers that Fiat is getting, I am not that sure that the strategy being followed by them is really that flawed in the short run. Fiat may be the 6th largest car maker globally, but it has a very limited reach in India on its own. And if it has to make a splash in the market it has to have a real good network, and for it either it can ramp up its existing network or use the distribution network of another established player.And considering the time lines to set up a stand alone network, Fiat went for the second option.And the deal isnt a fly-by-night deal, its a 3 yr deal, and is beneficial to both, as TATA is using Fiat’s network in other markets notably South America and also using Fiat’s formidable engine tech. So i believe its a very symbiotic relationship in its very nature.And now the reason why i believe, the network and the strategy is working great is straight numbers.Sales of Punto: 1502 compared to AStar : 1791 for Sept 2009, far better than the likes of Fabia, Getz and Jazz (Its real price competitors)But the surprise comes for the other model:Fiat has sold 1053 pieces of Linea (Sept 2009), its competitively priced Executive sedan, making it the highest selling executive sedan. And both these feats are commendable considering that both are very new models.
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Thanks !
I was actually searching for this Sales data of Fiat Punto and Linea !
Even i have mentioned in the post that both cars are success and have been successful in taking the FIAT image to a new level in India but the problem is the TATA attitude and after Sales service.If TATA could not keep up with the service standards for Punto or Linea then the numbers would definitely fall in coming months !
Now when you say symbiotic relation,i disagree.I think its a one sided relation in which TATA is gaining.The good numbers are mainly due to the PULL created by FIAT.But where is the PUSH.The incident i mentioned in the post is true and can cause problems for FIAT in coming months.UNO also had failed due to the exact reason.
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When we were kids, Fiat Padmini was still considered a nice car for home / personal use, specially in comparison to the fat Ambassador. In fact we appreciated the neighbor who owned it – not because he owned a car but also because Padmini looked nice in comparison to other dabba cars available in those times. As such I agree with your analysis. I think Fiat Padmini is an example of brand decay because companies fail to upgrade designs. In fact, if Fiat had might and was serious, it should purchase all those dirty and old age Fiat Padminis running on Mumbai roads as taxis in order to stop the vicious cycle of being linked with the outdated cars for ever…
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Nuevo Fiat Bravo…
I found your entry interesting thus I’ve added a Trackback to it on my weblog
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