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Old 9th December 2008, 22:18   #1
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Default How Serious is FIAL About its Indian Market Plans?

Fiat India Automobiles Ltd ( FIAL) is on a perestrioka (Russian word for overhauling) mission to totally revamp its image because it has taken a beating in the Indian market.
The Uno was an outdated model and was introduced here just after it was no more made for Europe.
The Palio came as a breath of fresh air in 1999, but the lovely car suffered due to its high fuel consumption (petrol model), high priced spares and the laid back approach of the dealers.
FIAL clung to the Tata Motors group to get dealer support.In return they promised R&D support for Tata Motors including supply of Fiat engines.
The Palio Stile saw its dawn in our markets through the Tata dealer's showroom glasses.
Now a slew of launches are lined up by FIAL
- the Fiat 500 has sold 41 examples (they showcased the 133bhp Abarth edition in the AutoCar India Performance Show last month)
- the Linea is due in early 2009
- the Grande Punto is due a few months later
- later on will come the Bravo
I came across a newsitem in Autocar India (Dec 2008) saying that Fiat Palio spares prices are reduced. The reductions are as follows:-

Fuel Filter OLD Rs 142 / NEW Rs 130 /Remarks(can buy popcorn for Rs12/- saved)
Spark Plug Set OLD Rs 1512/1180
Front brake pads OLD Rs 1233/ NEWRs1133/(can pay some toll tax with Rs100)
(set of four)
Clutch and OLD Rs 5104/ NEWRs 4000 /(money save is money gained)
pressure plate
Front bumper OLD Rs 4720/ NEW Rs 3304/ (good news for insurance cos)
Tail light assy OLD Rs 3534 / NEW Rs 2950 /
Front OLD Rs 4661/ NEW Rs 3068 /(that's the only master-stroke)

Other than the front windscreen, most of the other spares are priced at par with the spares of any higher C segment car.
We can conclude that FIAL is still not very serious and may not pick up sales wise, in our extremely cost conscious car market. A "B" segment car's (Palio) maintenance costs cannot be abnormally high, vis a vis the competing brands.

Last edited by anjan_c2007 : 9th December 2008 at 22:32.
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Old 9th December 2008, 22:45   #2
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I don't know how much they can actually focus on the individual markets - and ones such as India where they are near nowhere - in the current mayhem. They are fighting for the basics: Staying alive.

'Fiat too small to survive alone'- International Business-News-The Economic Times
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Old 9th December 2008, 23:16   #3
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The thing is FIAT is really serious about the plans in India. Especially because India is a volume market and if they can get a 15% market share then it will do wonders with the parent company FIAT Spa.

There was a news in Business Line quoting FIAT CEO that, FIAT is looking for strategic partners. He was telling FIAT needs to sell at least 5.5 m units an year to survive and at present it is no way near the target.
About Fiats India revival plan though, the major worry is that apart from the announcements in various forums, magazines and fiat site itself, we Indians are still waiting for their important C segment player Linea and the much awaited Grande Punto. Although delaying of launch Linea is justified because of all the tragic things that happened in Mumbai, its still very late. On the interest of trust of the Indian consumers, they shouldn't delay it any furthur and should launch atleast by Jan 2009.
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Old 9th December 2008, 23:47   #4
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FIAL is very much serious about it's India Operations. The Linea's spare prices when it will be launched will be unbelievable and all the imported spares are said to be heavily subsidized.The Service intervals for the New cars will be the longest ever in any segment of cars. Fiat India is really on a roll now.
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Old 10th December 2008, 01:05   #5
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I think FIAT should also start their own Showroom to sell their car. may not be the service. And they should also make agreement not sell any engine to TATA if they go out of India.
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Old 10th December 2008, 01:54   #6
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First FIAT India must leave the partnership with TATA and invest more on their own dealer-spare parts supply network.Premeir was no more.and TATA may not be the best for FIAT to partner with.
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Old 10th December 2008, 08:20   #7
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Originally Posted by deepclutch View Post
First FIAT India must leave the partnership with TATA and invest more on their own dealer-spare parts supply network.Premeir was no more.and TATA may not be the best for FIAT to partner with.
The problem is with the mindset of the people. There is no problem with the alliance with TATA. The real problem is since FIAT is not a hot selling cars in India, the dealers have to give extensive discounts just for the cars to be moving at a decent pace, thereby reducing the commission they get by selling a FIAT as compared to say selling a TATA. Once the sales starts to pick up, there wont be an issue. Lets hope at least this time people find that cars by FIAT are really quality product. I feel FIAT has already done their part by sticking on to this challenging Indian market and putting up a fight with new models, when they could have actually left it like the Peugeot. The one thing not lacking for FIAT is commitment.
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Old 10th December 2008, 08:32   #8
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The attitude is itself not good. This is India and not Europe. Palio lost because of poor FE and more so the poor image Fiat had gathered.
Even after than Fiat did not learn. The 1248cc diesel was in development before Fiat shifted to Ranjangoan. Still they did not plan to introduce this motor. It came through Suzuki. Any arguments like Fiat was busy with this, busy with that are basically lame excuses.
It is just the matter of planning and Fiat must learn from Maruti and Hyundai in this regard.

Right now, Fiat must end the relationship with Tata. Tata is not able to handle the servicing of Fiat cars properly. Tata is known for poor A.S & S. even for their own cars, let alone Fiat. No wonder that the Fiat owners regularly complain about being given step motherly treatment.

A.S & S. can make or break a car. Also quality needs to improve. The firist thing Fiat should do is develop a dealer network that is very capable. Simultaneously, bring in cars with better powertrains ( I am referring to 1.25 Linea ). If price of cars and spares are reasonable and their availability is not an issue, they will win or they will again end up in a bad situation.
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Old 10th December 2008, 09:36   #9
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hopefully Linea will change the story for FIAT in India
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Old 10th December 2008, 11:03   #10
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Originally Posted by muneemmk View Post
FIAL is very much serious about it's India Operations. The Linea's spare prices when it will be launched will be unbelievable and all the imported spares are said to be heavily subsidized.The Service intervals for the New cars will be the longest ever in any segment of cars. Fiat India is really on a roll now.

FIAT is even struglling to bring the Linea out and we talk about the spares,it will be cheap What to do with the subsidized imported spares? Can we use it for other vehicles? or with Grand Punto bcz they share same platform but GP in 2009/10/11/12................
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Old 10th December 2008, 11:06   #11
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Guys , I'm posting an email transcript copied from PUG (Palio User Group), this email was addressed by a palio customer to FIAL
Its a long read..

Email from a Fiat Palio Owner:
Dear Mr. Rajeev Kapoor & Mr.Mangesh Kodalkar, Greetings to both of you, I
introduce myself as Mahesh Natarajan a member & Group Moderator of Palio Users Group forum PUG. PalioUsersIndia : PalioUsersIndia The group has as on date 1850 members. I am sure you are aware of PUG as a FIAT cars users group on an all India basis. I am sure Mr.Kodalkar would have kept you informed about the regular interaction we group members have with him on time to time. My personal mail-id I use on the PUG forum is maheshnatarajan2000@... & this is my first email to you. I am already in touch with your colleague Mr.Mangesh Kodalkar from the Services. We have spoken with each other earlier. We from PUG take this opportunity to first of all to congratulate you & your team at FIAT India for the wonderful job being done in brining back Fiat from the brink of collapse and for the resurrection. We members in PUG have seen & been with FIAT India through all the ups & down FIAT India went through right from 2000 till 2008. A lot of members still swear by FIAT products and still believe that nothing less than FIAT and have purchased the la test models and are eagerly waiting for the new
releases such as Linea & Punto etc. Most of the members as you have mentioned in your own website under CEO corner "Smart Solution for Smart People" are people from various walks of life people who have put their hard earned money on FIAT products and you can see that most of the members are invariably working in respectable positions and see a lot of value in FIAT products. The purpose of writing this mail to you is to bring to your kind attention that off late there is a major concern & debate going on in our forum within the group members on the sudden steep increase in the cost of spares, delays in availability of spares, poor quality of service at TATA FIAT service centers, etc. Various members are now loosing hopes on FIAT products and in due course of time they would not really recommend a new
buyer. I would appreciate if you take some time to address this serious issue
with the Palio Users India community after all aren't we the actual users of
FIAT cars that you make and assure us that spares cost will have to be re-looked and improvement in quality of service and availability of spare parts in time etc. This has to be addressed by you sir. End of the day please remember that perception matters. When new potential customers come & ask for feed back from us PUG members in our forum we advise them to buy the FIAT cars where as most of the feed back from other websites & new paper article aren't so supportive of FIAT products so you can imagine how difficult it is to convince a new buyer. Many other brand of cars give regular advertisements where as FIAT does not. Remember it is 1 customer 1 car. For every car you make & that rolls out of the factory there has to be a buyer like me & some of the members here who should see value in it to invest the money to buy the car with so much negative feed backs from close friends,
relatives, family members & advisors. In-spite of all this we have been brave
enough to buy FIAT Cars. Here in PUG we have a saying buy Palio with your heart not using your brain to make the decision. As you aren't registered member with PUG you might not be able to send your reply to this mail to the PUG website. If you reply to me & ask me to forward your email reply then I can share your reply to the user community. We really look forward for the pleasure of a mail reply from you.

CEO Fiat India Comment:

Dear Mahesh,
Thank you foe voicing out your fears and I appreciate your concern on the brand FIAT. I would shed some light on the strategy being put into place by us at FIAT to bring it back to the past glory.In the past we did some grave mistakes for which customers and loyalists like you have had to suffer. We had a superior product in the form of Palio. But the main drawback it had was the import content. Majority of components like the Front and the Rear Bumpers, the Head light, Tail light, condenser etc were imported parts. The Lead times involved in ordering these imported parts and the commitments as well as the cost involved is well known to everybody. I need no speak on it. That gave rise to high import cost of spares and so the high cost
of spares. Second was the transition that FIAT itself was going through. FIAT was looking out for a partner who knew the Indian market very well and had an extensive reach and that came in the form of TATA’s. since this JV was signed in December 2007, the people involved our focussing to revive the brand FIAT. The commitment of both the partners can be seen visually in the form of the State-of-Art Plant being set-up in Ranjangaon, Pune and the plant from where Linea, Grande Punto and other future products of FIAT would be launched.The third focus was to avoid the dependency on imports. For that a lot of time and money has been invested in creating a vendor base who can supply the right parts to build cars as per FIAT standards and also supply the market requirement of Spares. That will ensure that all future products are completely indigenous and the Parts and spares are competitive with the local competition. Similar facilities will also be extended to Palio product as well. Those things are being worked out. But right now our focus is Linea and Grande Punto. With these great products we want our comeback to be a success and we are all geared up for that.This is the gist that I am offering to you as FIAT Loyalists. I am not sure how much of your doubts have been addressed by this and how much faith have I been able to restore in you for FIAT in itself. But we at FIAT are all committed to take FIAT to its past glory
That is all I can say.

Rajeev Kapoor
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Old 10th December 2008, 11:06   #12
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Originally Posted by deepclutch View Post
First FIAT India must leave the partnership with TATA and invest more on their own dealer-spare parts supply network.Premeir was no more.and TATA may not be the best for FIAT to partner with.
I somewhat agree to you. Everyone knows fiat is a super car and really no one bothers about the cost of spares as they are covered by insurance.

The real fact is that it takes lots of time to replace parts(waiting time). Service network is little. This is the same reason, not many chevy cars have been successful.

I have spoken to a Bosch service center mechanic in chennai, India. Even those seemingly experienced guys have difficulty repairing those fiat cars. And even if they find out a solution and request for parts from fiat, it takes weeks.

Fiat could be best for people living in Mumbai, because of ready availability of parts from the mumbai Fiat hub. Other than that, all other dealers suffer from poor service. Considering that most parts are locally manufactured, there is no reason why Fiat-tata has to delay delivery of parts. Either its Tata who is creating an artificial delay in service or it could be a serious problem with Fiat service

And, considering Fiat's affordable Palio stile. A 5.1 turning radius is not at all good for Indian traffic. May be its good for foreign roads, where they have multi-lane roads and people just have to accelerate and decelerate and don't need to maneuver. And now the Linea & Grande punto will have turning radius >5.1m, so is fiat really thinking?? . No way, it can capture 15% market share.
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Old 10th December 2008, 11:18   #13
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Okay so as of now, Tata cannot repair/maintain FIAT cars, Bosch also cannot and from experience we know that FIAT also cannot.

Where does that leave us?

To make things more complicated, Fiat's chairman has gone on record saying that the firm cannot survive the current downturn as they are not big enough. It is VERY likely that they will merge with a bigger auto firm soon:

Fiat chief executive warns: we can't survive alone | Business | The Guardian

So we have great cars from a company that cannot maintain itself or its cars.
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Old 10th December 2008, 12:12   #14
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I believe we have enough threads discussing Fiat India's various moves in past, present & future.

I am giving a few links You can search for more & continue the discussions in relevant threads







Thread Closed

Last edited by Technocrat : 10th December 2008 at 12:13.
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