Fiat says Tata, all set to launch brand stores

[p'arth]

Mod Note : Please continue the discussion in the new thread (Fiat revvs away from Tata dealerships. To set up its own distribution network). Thanks


Source: ToI Oct 21st 2010, Hyd Edition Page 14

As its partnership with Tata Motors failed to yield desired results, Fiat is charting out a new strategy to turn around its fortunes. The Italian car major is planning to open exclusive company-owned brand stores in major cities, apart from hiring a consultant to suggest revival path. The brand stores would be an indirect way of starting its own retail format without involving Tata Motors, though the company denies this. The stores will assist in generating inquiries (and hence sales), which means the objective of the move is to push marketing of Fiat cars. Fiat has been a laggard in the Indian market, despite having competitive products like Punto and Linea and failed to ride the boom in car sales. Alarmed, it is now taking steps to highlight the brand more aggressively, “something that will be done through the exclusive brand stores,” Rajeev Kapoor, MD of Fiat’s India operations, told TOI.

The company, that has seen sales fall 8% in the first six months of this fiscal at a time when the overall car market boomed 34%, will open the brand stores, or “image points”, at Delhi, Mumbai, Pune, Chennai and Bangalore. “These stores will display the ‘real’ Fiat brand, and would be a place for meetings, a place for small gatherings and events,” Kapoor said. Fiat will also display its merchandise and accessories at these brand stores, which will also serve authentic Italian coffee. “We want the customers to experience what the Fiat brand stands for as we feel that the focus at the dealerships is more on selling cars than on brand promotion.”

Fiat, known globally for style and flair, is trying to recreate the model that it has developed in several countries to highlight its brand. Globally, the company has several image points to showcase brands like Fiat, Lancia, Alfa Romeo and Maserati. Kapoor, however, emphasised that the stores will not mean setting up of an independent retail network by Fiat. “This will remain confined to the joint Tata-Fiat dealerships. But yes, the stores will help in generating sales inquiries and pass them on to the dealerships.”

Fiat has hired global consultancy firm Accenture to suggest ways to improve its position in India.

Fiat and Tata Motors have a 50:50 joint venture - Fiat India Automobiles Ltd for manufacturing cars and engines for both brands at a factory in Maharashtra. And apart from the manufacturing tie up, Fiat has also entrusted Tata Motors for distributing and selling its cars through its dealerships that also provide after-sales support. It is here that the Italian carmaker seems to be facing issues, something that can be seen from its moderate run with sales.

Good move for brand awareness. But they still will not sell cars in these stores and will act as a channel for redirection to dealerships. But yes the initial touch points of presale customer service will become better.

[GTO]

In other words, Fiat is opening up boutique showrooms (link to thread on emerging trends (Skoda's Boutique Showroom (Bandra) - An emerging trend)). In my opinion, Fiat should manage these outlets directly (no middlemen), market their cars the way they want to, close the deal and then pass it off to a regular dealer for formalities.

Good way to maintain their partnership with Tata, and improve the sales experience.

[rameshnanda]

This is indeed a great news. This is giving me more push to move towards Fiat as I am planning for a new Diesel car in another couple of months.

[carboy]

Originally Posted by rameshnanda

This is indeed a great news. This is giving me more push to move towards Fiat as I am planning for a new Diesel car in another couple of months.

How is this better for a person buying a Fiat car? This is just creation of a new place where you can see the car - but you will still end up taking delivery from a Tata-Fiat dealer & go to a Tata-Fiat service station for service.

[Meer]

It is a right move in the right direction. The symbiotic relationship which was envisaged with Tata did not work out. With the recent launch of Linea T-jet and an excellent value proposition in the GP, I think its high time FIAT got its sales act together. Once the product goes into downward spiral, even interested folks start a re-think and move away. And it would be really sad to see such nice products fail because of lack of interest or bad marketing strategy by FIAT.

Come on FIAT, show agility and responsiveness, atleast now.

[aks_karthik]

I was very Happy when i read this news in TOI this morning.
It's a welcome change and i've been expecting this since i bought my car though it's only a Brand Store.
I wish they have to open their own sales showroom and service centre too.
Tata sales and some of the showroom are in very pathetic condition and car lovers hate that condition inside showroom.
Hope,this move will increase sales for FIAT.
GoodLuck FIAT

[carboy]

Originally Posted by aks_karthik

I wish they have to open their own sales showroom and service centre too.

When Fiat signed a partnership with Fiat, a lot of Fiat owners celebrated because they felt that the Fiat A.S.S was pathetic & the tieup with Tata could only improve it.

[auto-one]

Sorry, Iam not convinced. I feel Fiat should have improved upon their quality and service issues first. A brand is not built merely by visibility and other external factors, but is built by the product attributes.
Why does Fiat find it necessary to appoint an external agency to find out its short comings ?

[speedKrazy]

Good move i should say it would definitely improve FIATs position in India .I am of the opinion that reason for FIATs current sales dip is because 25% product related (read fit and finish,performance,brand) and 75% marketing related.This move should revive the FIATs lost glory and improve the brand image.

[JVH]

Originally Posted by auto-one

Fiat should have improved upon their quality and service issues first. A brand is not built merely by visibility and other external factors, but is built by the product attributes.

The way I see it, its a step in the right direction. But again Car delivery and A.S.S are sore points as far as FIAT is concerned and unless this is addressed, progress is difficult. It would be interesting to see what moves FIAT make to address their present situation. T-Jet is launched, brand stores launched, speculation of Punto T-Jet and what next?

Did not get your take on Product attributes! FIAT has decent products in their line up and T-Jet is a great proposition. It's their inability to package these products with good/great pre-sales and after-sales which should be the biggest concern for them.

[hillram]

This is a very good idea.Fiat should also bring its official merchandise which is available all over Europe,ofcourse at affordable prices.

[shankar.balan]

the Back-end delivery, service and after sales processes have to live up to the hype being created at the front end by the new stores and so on.

end of the day it is the overall experience that counts, not just the show window, however beautiful that may be made to look.

like they used to say - "one can't judge a book by its cover"

[ACM]

Good Move by Fiat

1) Enables them to maintain relationship and support lines with TATA.
2) Relationship with TATA is actually flourishing from a business point of view with the engine sharing etc, but not helping FIAT brand.
3) Fiat can keep their FIAT 500 in these showroom just to get a better brand image.
4) Buyers coming to these showroom would not be tempted by the TATA value proposition with the same engines and features in a different packaging.
5) Fiat can take give the customer pricing and even close the deal, and just leave the servicing etc to the Dealers.
6) These would serve as customer attraction points. TATA dealer would be the fulfillment agency.
7) These would most likely have better ambiance than the TATA outlets.
8) It remains to be seen if these would be just boutique sized or actually mega displays.
9) With the Arrival of the ARIA - TATA now has it's own wide range of products to showcase.

A step in the right direction, I believe the relationship with TATA is good for FIAT they just need to step up with some marketing initiatives of their own.

They could additionally provide 1 person on their roles at each TATA outlet towards sales.

[aargee]

This is an excellent news; though I love the looks & specs of new Punto, I've been suggesting people to stay away from it due to the step-motherly treatment of T.A.S.S. This forum has several horrible stories of how Tata guys lurkes away a potential Fiat customer to Manza & Vista with attractions & non attentiveness.

Its really bad that such good products like Punto & Linea are doing poor in sales. Any news as how would Tata manage without Fiat in the west?

[rameshnanda]

Originally Posted by carboy

How is this better for a person buying a Fiat car? This is just creation of a new place where you can see the car - but you will still end up taking delivery from a Tata-Fiat dealer & go to a Tata-Fiat service station for service.

As a fan of Fiat, I see this as a welcome initiative by Fiat to treat its customers better. I have visited the Tata dealerships when Fiat launched the Punto and the Linea. The experience I had there wasn't worthy. Definitely not to the standards. Even the sales guys don't know about the cars they are selling. I feel with this initiative by Fiat, they may slowly move towards separate service stations too.