Fiat India : How much longer before they shut down?

[GTO]

The current story of Fiat India:

1.NO PROFITS

Fiat India has been bleeding and is fast approaching the point of fatal haemorrhage. They have not been able to pull their balance sheets out of red ink.

2.NO SALES

Presently selling about 200 Palios and Petras a month. They need atleast 2000 units a month to break even, thats a whopping 5 times the current sales figure.

3.NO SUPPORT

The parent - Fiat SPa - has refused to pump any more money into the dying Indian operations

4.NO LEADERSHIP

The Italian management knows nothing about selling cars. They arent even capable of selling beer in a hot desert!

5.NO DEALERSHIPS

Dealerships are abandoning Fiat India and switching over to more lucrative automotive brands (E.g Shaman Fiat to Shaman Ford in Mumbai).

6.NO WEBSITE

Their website www.fiat-india.com has been down for a week now. Reason? Non payment of bills.

7.NO SERVICE

The service quality is lower than it has ever been - And thats saying a lot.

8.NO BRAND

Fiat has destroyed its brand in the eyes of the Indian public. There is absolutely no confidence in the company or its products anymore.

More than anything, Fiat India is not doing anything about the current situation! Forget sleepless nights, I dont think they have even realised the gravity of the situation.They are too busy thinking "Hey our Palios the best by a mile." while Maruti, Hyundai and Tata are achieving record sales figures for the Alto, Santro and the Indica!

The bottom line is that Fiat is going. Theres no two sides to that. The only question is when?

GTO

[Rtech]

What Fiat India needs is it's own Carlos Goshn to perform the unthinkable and bring Fiat back into the black.

However, with no support from it's parent company, which is facing it's own set of problems trying to survive, the future does look grim for Fiat India.

The problem here is, even if Fiat approach the market with renewed vigour, there is no confidence left with the Indian public. Indian's have long memories and do not forgive easily. Ford managed to just get away with this by launching the Ikon in the nick of time along with a great advertising campain.

I think Fiat missed the bus and it's now too late, no matter what they launch. Sad but true.

[Samurai]

If the company does close shop, what happens to all the Palios and Petras in the countries? What about service and spares?

I was planning to buy a Petra in June, now I am wondering whether Fiat India will remain open till then.

[GTO]

The problem here is, even if Fiat approach the market with renewed vigour, there is no confidence left with the Indian public. Indian's have long memories and do not forgive easily. Ford managed to just get away with this by launching the Ikon in the nick of time along with a great advertising campain.

Thanks. Just added reason no. 8

GTO

[anoops]

dash it!! this is my worst nightmare comming true. i dont care about the service, that ive sorted out, but when i sell my car iam going walk away with a hand full of coins!!!

[gkrishn]

Originally Posted by GTO

The Italian management knows nothing about selling cars.

Forget about selling cars. Look at the Italian fiat's approach to the problem they are facing. They are trying to pull the GM into deep trench they are already in. Looks like they have to make the GM execute its put option, to keep fiat brand alive. And I guess both the party are in for a long legal battle.

GM for its part recently laid off 20,000 people in opel.

[raihan]

This can only mean one thing: ur'e gonna get Petra/Palio at throw away prices down the line. Boy am I gonna luv to get my hands on the 1.6 GTX.
Maybe I can get one in exchange for my crab zen, any takers?
cheers,
Rai

[nmdeccanet]

I think by march-april 05 we will know when Fiat or GM is going to cave in...this is a capital intensive business..fiats suppliers are not likley to extend the credit facility if they know the company is in trouble..that means, not only fiat has to dish out cash to make the cars, they have to wait and pray that the cars get sold within 1-2 months of manufacture..biggest goof up these blokes made is making the price 4.75 ex factory, they shud have kept it higher and then offerd good deals like Ford to rope in the consumer..the indian consumer LIKES good deals.. so far as VFM is concerned, if s/he hasnt got a discount, s/he wont care for VFM..

[DOHC]

I think they are staying to stay put irrespective of what ever their status is hoping ofcourse for a miracle. How ever pathetic their existance is going to be there will manage to sell cars and wait for some one else to come in as a JV partner.

Last heard from a local fiat work shop manager that they are right now discussing wil Ashok Leyland for a JV. So expect the Palio to take on the role of the FIAT 118D and be there for a lot of time to come with the same poor dealer support and service

[Technocrat]

even i am hopina fora miracle, coz i thot Fiat's gonna closed down aftre the Uno disaster but the they came wid better vehicles.. so u never know

[lamborghini]

lets just hope that one of the guys atfiat learn about this site, register and follow our advice or let us handle fiat india
thats the onlyway out but for my part i know they arent going to quit on us

[amit]

Fiat India is badly stuck in a chakravyu.
They can't abandon India. Even they know it. Only a idiot is going to pull out of India or China right now. Shaky they may be but they have some presence in the second fastest (and soon to be the fastest) growing market in the world. Pulling out now would put a full stop to their future earnings. This part of the world is where the $$ are gonna come for Auto makers now. I personally don't think that the problems they face can't be over come. But what they need is understanding the Indian customer pysche. They are trying to sell a well priced car like the petra without too much disounts. Thats a mistake. What they should do is price it at about 5.5L and then tell the customer they are getting discounts and deals and sell the car at 5.00L. That way they will still sell the car at a higher price then they are currently! Indian's love discounts. Give us discounts and the product is VFM for us, even if we pay more then what we would without discounts!
Also they need to throw the european attitude of doing business. If you look at any car market in the world, European car makers give the least discounts. Maybe because they feel that they don't want to dilute the brand or whatever but in India it wouldn't work. Even skoda is not giving discounts and losing out to corolla and optra in sales.
As for them pulling out, i somehow feel they will continue to be here in the miserable state that they are in until the day sales of their cars will come to ZERO units and then they will have to go automatically.

[.anshuman]

is it here in india?i think only traces are left.......its silence before storm like daewoo india......

[GTO]

Only a idiot is going to pull out of India or China right now. Shaky they may be but they have some presence in the second fastest (and soon to be the fastest) growing market in the world. Pulling out now would put a full stop to their future earnings. This part of the world is where the $$ are gonna come for Auto makers now.

Fiat India IS FULL of idiots, dont we all know that. And an idiot who has his pants on fire will certainly leave the second fastest growing market in the world - Example Daewoo and Peugeot Quite honestly, they go beyond the state of idiocy since they didnt care enough while being present in this growing market with the best hatch.

What they should do is price it at about 5.5L and then tell the customer they are getting discounts and deals and sell the car at 5.00L. That way they will still sell the car at a higher price then they are currently! Indian's love discounts. Give us discounts and the product is VFM for us, even if we pay more then what we would without discounts!

What you speak about is pricing strategy. Discounts at best will be a temporary solution...not a permanent one! And that is just ONE component of a successful product. Balancing the different variables is an art, and one discounting scheme is not going to be the start-all magic formula. Discounting dilutes the brand or whatever is left of it in Fiat Indias case.

And if discounting indeed was everything...Honda would not have been the No.1 in every price bracket they are present in with the NHC, CR-V and the Accord.

Even skoda is not giving discounts and losing out to corolla and optra in sales.

Last I checked, there were healthy discounts available throughout the Octavia range excepting for the RS. And speaking of the European car makers...I can get you discounts on the entire Mercedes range.

As for them pulling out, i somehow feel they will continue to be here in the miserable state that they are in until the day sales of their cars will come to ZERO units and then they will have to go automatically.

Well, considering that they are selling 200 Palios compared to the 20,000 a month that the Alto, Santro and Indica sell....thats about 1% of the slice. Pretty close to 0, dont you think?

I am pretty surprised to see that almost 50% think that Fiat is going to pull off a miracle. While I do hope that they do, I have to yet see one strong argument as justification.

What exactly do the believers have faith in? The management?

GTO

[islero]

I honestly think Fiat are in some kind of a mist of superiority, when they're actually losing.
They forget that in India, the best car or the best-value car needn't always sell well. One needs good relationship with the customers too.
And whats the point of a cheap car if you're going to lose all the money you saved due to poor FE and exhorbitant service costs in the long run?
GTO, youre right, Fiat India is fulla idiots.