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Old 4th May 2012, 11:17   #91
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by GTO View Post
.

The question is : How many comebacks can a brand sustain? While the competition goes from strength to strength, Fiat appears to take a step back ever so often.

Importantly, with a weak home market (i.e. Europe), just what kind of resources can Fiat allocate to India?

Here's an article that hits the nail right on the head.
I think Fiat now realise this. They know that they make good cars but cannot sell and service them to save their lives. Their survival is hinged on

1: Selling engines - india strategy
2: Selling platforms - Chrysler smaller cars are now all fiat based

Only way to attract dealers are to sell high margin items - enter Jeep and Alfa Romeo. The latter will be a challenge since reliability has not always been a key point. As for Fiat cars, the Punto is not exactly in its prime of life, the Linea is brilliant but invisible and there is not much else. Fiat have defined themselves as a small car player, for that you need volumes. to achieve this, you need

1: Good Product - Fiat were there, they need something new if they want to leap further

2: Good pricing - to get volume, Fiat need to price lower, can they afford this, no!

3: Service and coverage - Tata did not deliver, the competition has moved on.

Only way might be to sell fancy niche cars in limited areas - like Mini etc unless Chrysler revenues can be used to generate volume through a loss leader strategy.

Only question - it took Fiat, four years to realise this alliance was not working!
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Old 4th May 2012, 11:27   #92
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Originally Posted by ajmat

I think Fiat now realise this. They know that they make good cars but cannot sell and service them to save their lives.
Precisely why they need a third party partner. What about something like TAFE? I believe they provide service for Tata also in some cities like Coimbatore.

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Originally Posted by ajmat
3: Service and coverage - Tata did not deliver, the competition has moved on.

Only question - it took Fiat, four years to realise this alliance was not working!
IMHO everyone is being too harsh on Tata. And it took Fiat so long to figure out something is wrong, and then do something about it. That is the problem, not the alliance. By the time Fiat works itself up to where it has to do something, the only option looks like some drastic measure or the other. Why not work within the alliance to gain greater control or visibility. Fiat is not powerless, they hold the engines that run Tata's most successful models, so I'm sure they could have done something about it if they had wanted to earlier. Maybe they were just biding their time, waiting for some reason/trigger, and this was the plan all along?
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Old 4th May 2012, 12:02   #93
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by GTO View Post
...If my toe hurts, the last thing I'd do is chop my leg off!!
i agree with your points GTO. But if the toe hurts so much that the person is about to die, then chopping off his leg to save his life might not be a bad idea.

Fiat is in such doldrums that it needs drastic steps to turn around, and not fine-tuning of strategies here and there. In poker terms, Fiat has no option but to go all-in.
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Old 4th May 2012, 12:05   #94
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

IMO, rather than creating a dealer network FIAT should try to open company-owned showrooms/service points in their 22 select cities for a start. No more dealer-bashing! India's only auto brand that you can buy/service directly!

The investment will be considerably high, but they can start such a setup much faster. It will also increase customer confidence to an unprecedented level. Maybe they can deduct dealer margins of cars/spares to a certain percentage and pass the benefit to customers too..

Just my imagination
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Old 4th May 2012, 12:08   #95
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by silverado View Post
Move sends out a positive signal to current/prospective owners that FIAT means business here.

Hope to see PANDA soon in india.
Setting up cafe's is also a good move, eagerly awating the one coming up in Pune.
Good move agreed! They could have instead invested the same money in setting up COCO dealerships. That way, they wouldn't have been playing "catch-up" for the decision that they've made. Now, the question is, how fast can FIAT lure investors and set-up franchised dealerships? If all this can happen within a Quarter from now (accounting for time spent to identify and set-up a dealership), FIAT is going the right way and there will not be much damage to the so-called damaged image!

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Originally Posted by GTO View Post
Basically, Fiat is now going to start all over again. FOR THE NTH TIME! This is NOT what you want your potential customers to read in the newspapers every other year. The one who is going to spend 5 - 10 lakhs on a car wants to do so from a STABLE company. With Fiat, there is just way too much inconsistency. Lack of stability & consistency will only further damage the brand, whose reputation is already severely dented.

The question is : How many comebacks can a brand sustain? While the competition goes from strength to strength, Fiat appears to take a step back ever so often.

Importantly, with a weak home market (i.e. Europe), just what kind of resources can Fiat allocate to India?

Here's an article that hits the nail right on the head.
I am sorry but I do not agree that they have to start all over again.
From a business standpoint, you have a state-of-the-art manufacturing facility and you're selling your engines better than anyone in the world. There is surely a source of income although the profitability is not comparable to Maruthi or Tata or even Hyundai for that matter.
From a management standpoint, all they have to do now is, bring in different options for setting up dealerships as in a lesser initial deposit, a better profit sharing pattern etc to lure businessmen into investing money with them. FIAT can definitely provide a better profit sharing pattern with dealerships given that they were sharing some percentage of the profit of sales when they were in the JV.

Let's hope this would be their last comeback in India and hope they succeed! All the best FIAT!

Weak home market, agreed. Period!

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Originally Posted by fireblade007 View Post
I don't think that this move by fiat is going to be successful. With Tata, at least they were surviving.
With or without Tata, they've set out on a voyage and they are slowly getting things in the right place. Survival; it's too early to predict!

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Originally Posted by GTO View Post
Who is we? I certainly didn't! While I'm no fan of Tata's after-sales (having experienced it myself with the Indigo), I continue to insist that sticking with Tata dealers made a LOT MORE SENSE than starting from scratch in year 2012.



Premium? Tata has products that are way more expensive than Fiats (including the Aria, Safari etc.). The Safari sells more than the Linea or the Punto. Also, the price difference between a Vista <-> Punto or a Manza <-> Linea is not so much that the Fiats suddenly become premium. The price difference is lesser than the Swift & Alto (as an example) which are successfully & satisfactorily sold in the same showroom.

If Fiat buyers were expecting "premium" service in a Tata dealership, well, that just explains the irony in the mismatch of expectations & delivery.



Agreed. But it is simpler to work this issue out, than start an all new dealership network! If my toe hurts, the last thing I'd do is chop my leg off!!
Agreed that FIAT is not premium.

But if my Toe hurts and is diagnosed to be a Gangrene, I would certainly chop that toe off or even the one that's beside it just to be sure that I save my leg! (No offense meant! Just my opinion)

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Originally Posted by Daewood View Post
It's not just guts, it's a calculated move.
This decision was not taken overnight. They were doing a market survey for the past 15 months with the help of a reputed third party.
If Nissan can sell 3000 odd cars per month with less than 20 dealers and 3 models, why can't Fiat?

IMO comparing the price of an SUV with B-seg hatch and it's sedan derivative is wrong.
Just because the price is higher doesn't make a product 'premium'. The 'premium'- brand image is in the minds of the consumer and not in the price tag. Just like how a Fabia from Skoda is a more premium brand when compared to Punto in India, even though the Fabia may be cheaper than a Punto, the Punto and Linea are a premium brands when compared to a sub-brand like Vista or Manza from Tata Motors. To a common man Tata car brand is synonymous with Indica and that carries that heavy tag of the 'taxi brand'.
Exactly, if new comers (in the Indian market) can do it, why can't FIAT?

Last edited by Driving_Nomad : 4th May 2012 at 12:10.
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Old 4th May 2012, 12:18   #96
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

So now Fiat is opening an individual distribution network?? Who exactly is going to walk into their showroom to buy a car except the Fiat loyalists??

I know many many people who wouldn't even consider a Fiat product while purchasing a new car even though it had everything they ever wanted. Why?? Poor of brand image, lack of presence and the reliability stories around (personally no experience).

I don't even think that bringing in Alfa Romeo may help considering the pricing and the new segment which is yet a '?' in India. Fiat doesn't have such a strong base here that they can begin a completely new segment of say a premium hatch with the Mito to begin with, and expect it to change fortunes for them. The same was tried by Ford and Chevrolet (mind you they were not well established then) much before time with the B+ hatch segment and failed miserably.

What they now need to do is say good buy to the Punto with its dated interiors and bring in the Evo with the range of multi-air engines and re-position the cars (work on the pricing like Skoda Fabia). Also they need to increase their presence in India with newer and regular launches and updates to their existing range rather than sitting with their hand on their head and cursing Tata for not pulling them out from the grave that they had dug themselves.
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Old 4th May 2012, 12:20   #97
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

Whether FIAT's separate distribution channel will work out as a strategy is questionable. At least while it was a joint dealership, there were customers who walked in to buy a Tata car and walked out with a FIAT car. The numbers are few, but this did happen. In its current form, I doubt FIAT's own branding and marketing is capable of getting customer footfalls into its dealerships. Not every car buyer is a T-BHPian!

I have a lot of people in my office who agree that the Punto is a good car. But they are unwilling to bet on it given FIAT's service record. As a FIAT owner for the last 10+ years, I have not faced any service issues, but the stigma persists as far as the general consumer is concerned. This could take a turn for the worse if this split is not handled well. There is no news on who will service the existing FIAT customers, and from when. This is a golden chance for FIAT to show that they care for their customers (as much as their customers care for their cars ). But given FIAT's track record, this chance may be lost too, leaving the customers in the lurch.
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Old 4th May 2012, 12:28   #98
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by Driving_Nomad View Post
Exactly, if new comers (in the Indian market) can do it, why can't FIAT?
Fiat is in an unenviable position in Indian market. The advantage that the new comers such as VW, Nissan etc. have is, people here haven't heard much of them. There is a sense of freshness about the brand. Also helping is the changing people's mentality - they are willing to take lot more risk to own something that their neighbors don't. But Fiat neither has that 'freshness' about them nor does it enjoy the reputation that Maruti-Suzuki has.


I think it's a fair question. If there is going to be only 1-2 dealership in a city like Bangalore, instead of 6-8, may be there is some business opportunity. But, of course, one has to make the leap with some confidence in the Fiat brand. To instill that confidence, Fiat will have to do lot of things from their side too, one such I can think of is, bringing some really brilliant and diverse products to India. It is going to be really interesting. I will keep my fingers crossed for Fiat.

Last edited by GTO : 4th May 2012 at 13:32. Reason: Removing quoted post which has been deleted
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Old 4th May 2012, 12:30   #99
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by GTO View Post
Basically, Fiat is now going to start all over again. FOR THE NTH TIME! This is NOT what you want your potential customers to read in the newspapers every other year. The one who is going to spend 5 - 10 lakhs on a car wants to do so from a STABLE company. With Fiat, there is just way too much inconsistency. Lack of stability & consistency will only further damage the brand, whose reputation is already severely dented.

The question is : How many comebacks can a brand sustain? While the competition goes from strength to strength, Fiat appears to take a step back ever so often.

Importantly, with a weak home market (i.e. Europe), just what kind of resources can Fiat allocate to India?

Here's an article that hits the nail right on the head.
Rush, my friend, interesting reading the "Business Line " Article . Thanks for sharing.

My only point is calling this news as a "Comeback" for FIAT is not justified.

I quote the Joint statement - "Fiat and Tata have agreed that, in order to further develop the Fiat brand in India, management control of Fiat’s commercial and distribution activities will be handed over to a separate Fiat Group owned company."

Further it adds "Development of the new Fiat dealer network for India will start progressively and the 178 existing Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network."

So, its only taking the present arrangement to a more FIAT controlled setup.


Some notable Highlights :
FIAT has launched the Linea and Punto 4 years back and holds good Road Presence across the country even today. We even have a 2012 version of both models launched very recently.

I have visited the FIAT Caffe in Delhi and there is nothing like that concept by any Car Manufacturer in the country today. There is a second FIAT Caffe coming up in Pune shortly.

There is only promise for improvement in this move and not for paranoia created in minds of people.

Infact the BusinessLine Article also ends with the statement "Fiat has stated that the manufacturing alliance will continue. Apart from Tata Motors, its other customers for the 1.3 diesel engine include Maruti Suzuki and former ally, Premier. Fiat could even use the plant as a base for supply of engines to its operations in China."

Its all a step in direction of Growth and definitely not a "Comeback".

Last edited by FastLove : 4th May 2012 at 12:33.
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Old 4th May 2012, 12:41   #100
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

GTO is not biased. It is his businessman genes.

Did you know the number of Puntos and Lineas Fiat sold last month? Exactly 1000 cars in APR and 1415 cars in MAR 2012.
http://www.team-bhp.com/forum/indian...nalysis-5.html (April 2012 : Indian Car Sales Figures & Analysis)

Tata has 172 or so dealers and let us say Fiat will sell 2500 cars per month through 170 dealers. That's roughly 15 cars per month per dealer.

Now read GTO's question again and you can see the meaning of it.

Last edited by GTO : 4th May 2012 at 13:32. Reason: Removing quoted post which has been deleted
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Old 4th May 2012, 12:46   #101
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Originally Posted by prakash_ajp View Post
I think it's a fair question. If there is going to be only 1-2 dealership in a city like Bangalore, instead of 6-8, may be there is some business opportunity. But, of course, one has to make the leap with some confidence in the Fiat brand. To instill that confidence, Fiat will have to do lot of things from their side too, one such I can think of is, bringing some really brilliant and diverse products to India. It is going to be really interesting. I will keep my fingers crossed for Fiat.
How do say its a fair question? Let FIAT at least start with this new venture and then we should comment may be 6 months or a year down the line. Even after a year, if they are not able to make any progress, then we can make this comment. NOT NOW!

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Originally Posted by sandeepmdas View Post
Did you know the number of Puntos and Lineas Fiat sold last month? Exactly 1000 cars in APR and 1415 cars in MAR 2012.
http://www.team-bhp.com/forum/indian...nalysis-5.html (April 2012 : Indian Car Sales Figures & Analysis)

Tata has 172 or so dealers and let us say Fiat will sell 2500 cars per month through 170 dealers. That's roughly 15 cars per month per dealer.

Now read GTO's question again and you can see the meaning of it.
How does numbers make any difference to the quality? Swift became the highest selling car in India this month. So highest number of buyers have a faulty braking system which they are unaware of. But we dont say, who will buy the new Swift.

Last edited by mobike008 : 7th May 2012 at 11:16. Reason: back to back posts
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Old 4th May 2012, 12:50   #102
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by ajay_satpute View Post

So if we say that who will invest in FIAT, then we should have made the same statement on the threads about all above mentioned cars. Who will invest in Toyota, Maruti, Renault-Nissan and VW group?
FIAT makes safe cars , builds them like a tank , Saves the occupants of the car ; but cannot safeguard the Dealers .

Most "Others" make not very safe cars , puts occupants at Risk but gives "excellent Dealers"

We choose the Latter

Last edited by GTO : 7th May 2012 at 12:04. Reason: Only 2 smilies per post allowed. Please refer to our rules
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Old 4th May 2012, 12:52   #103
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by sandeepmdas View Post
Tata has 172 or so dealers and let us say Fiat will sell 2500 cars per month through 170 dealers. That's roughly 15 cars per month.

Now read GTO's question again and you can see the meaning of it.
As a businessman, I am sure anyone is free to decide where to put money or not. But if I were a Fiat person, my attempt would be to only increase the sales from the measly figures being done by the tie up with Tata.

I do think Fiat has taken a next step. Whether it is a step forward or backward can only be determined by their efforts and smart positioning. Perhaps they have some aces up their sleeve that they dont want to share at the moment, as this could have a negative reaction from Tata.

This could be a way to get out of this tie up, build their foundations and then bring in the stars.
This is also a possibility at the moment as much as the possibility that Fiat could go kaput.
I have none of the land/ labour/ capital/ enterprise that economics requires for a business. But to be honest if I had even 2 out of the 4 stated above, I would be willing to take a punt on Fiat.

Disclaimer: I am not a fanboy, dont own any Fiat cars and am not related to anyone who owns Fiat or works for them. Just my 2 cents as a prospective investor.
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Old 4th May 2012, 12:53   #104
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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Originally Posted by ajay_satpute View Post
How do say its a fair question? Let FIAT at least start with this new venture and then we should comment may be 6 months or a year down the line. Even after a year, if they are not able to make any progress, then we can make this comment. NOT NOW!
I understand your passionate about Fiat cars. As much as I like Fiat cars (I own and love my Linea) I do not like to see the world through colored glasses all the time. Unlike us, the ones who will own and cherish, the dealers are not going to be passionate or personal or sentimental about the cars they will sell. It's pure business for them. All that is going to matter for them is, how soon can they break-even and how profitable will they be. Makes sense?
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Old 4th May 2012, 13:12   #105
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Default Re: Fiat revvs away from Tata dealerships. To set up its own distribution network

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As a businessman, I am sure anyone is free to decide where to put money or not. But if I were a Fiat person, my attempt would be to only increase the sales from the measly figures being done by the tie up with Tata.
+1. A smart businessman is one who will create an opportunity for himself and not use an opportunity already created by someone else.

People investing in FIAT brand will definitely want to cash on the fact that there would be no/less competition in terms of other FIAT dealers, meaning monopoly of the brand. Heck, if you could have dealerships for Premier and Hyosung, then FIAT is a much better name (remember they own Ferrari!)

P.S.: I don't own a FIAT car or am associated with FIAT in any which way. The above are just my 2 cents

Last edited by MurtazaGhiya : 4th May 2012 at 13:14.
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