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In today's Economic Times....

Hinduja's close to buying Fiat India

MUMBAI: The Hindujas appear to be closing in on the beleaguered automaker Fiat India. The group is said to be in advanced stages of negotiations with the Italian parent.

Sources said, ‘‘Talks are on between the Hindujas and Fiat to buy out Fiat India. A high profile meeting is expected to take place in London next week to finalise the deal.’’ Hindujas have recently visited Fiat India’s Kurla plant, sources added. Hinduja group sources said, ‘‘We are exploring opportunities to enhance our relationship with Fiat and passenger cars is one of the options.’’

Sources also said that Fiat India earlier approached the utility vehicle maker Mahindra & Mahindra (M&M) through an investment banker. However, M&M already has an agreement with French car maker Renault to manufacture passenger cars in India.

When contacted, Paolo Castagna, the newly appointed managing director of Fiat India said in an emailed reply, ‘‘Fiat Auto India Ltd, is a subsidiary of Fiat Auto SPA Italy. Any discussion about change of shareholding pattern is not the mandate to the local management but it is a responsibility of our actual shareholders.’’

The Hinduja group already has a 5 year successful joint venture with Fiat SpA through IVECO, where the Fiat Group holds 51% stake, while Ashok Leyland holds the balance equity. ‘‘Since Ashok Leyland already has a relationship with Fiat through IVECO, buying out Fiat India, would be the natural way for them to enter the passenger car market,’’ an industry expert said.

However, R Seshasayee, managing director, declined to comment on the matter. Ashok Leyland, makers of heavy trucks, commands a 20% share while its competitor Tata Motors makes from passenger cars to heavy trucks.

Fiat India Pvt Ltd, established in 1998 has been in a slump, except for a spike in sales in 2001, when the company introduced its only successful model — Palio. However, due to a mediocre after-sales service and branding issues, the company failed to hold ground in the growing Indian automobile industry.

The company currently has two models in its portfolio, Palio and Petra.

‘‘Fiat recognised India as a growing market already in 1950’s and accelerating its investments in the beginning of this century. For Fiat, India has been a strategic market and over the years it has made around Rs 2000 crore of investment,’’ Castagna said.

Despite an installed production capacity of 60,000 units per annum, the company has been selling less than 1,000 vehicles per annum. It had also bought its second plant at Ranjangaon, near Pune, which is lying idle.

The parent company Fiat SpA has been struggling with a consistent drop in its global sales figures over the last few years, leading to a staggering financial crunch. The Turin-based auto maker has accumulated $14 billion in net losses and about $6.4 billion in net debt.

In February this year, General Motors sold off its 20% interest in Fiat for $2 billion, abating the debt burden significantly.

Looking at it objectively, other car manufacturer's too have had poor sales figures like FIAT. but the difference was they were not in half as much financial trouble. Additionally FIAT also had the burden of some lousy dealerships which really hit them hard. Going by the numerous discussions here, i think most indians are more worried about the dealership and A.S.S. hassles than the financial health of FIAT and the two issues are being linked together, which I don't think should be the case. FIAT's financial problems are no excuse for dealers to offer poor service to their customers. Also most people do agree that FIAT makes good cars.

It needs to be seen what kind of arrangement is arrived at with this new initiative.

The way I see it, FIAT has the infrastructure to expand / increase its production facilities. Their plant at Ranjangaon is lying idle.
They do have a good mix of quality cars in their line-up.

I believe entering into a JV purely to alleviate your financial troubles is not a good idea, as you will almost always get the short end of the stick in such a deal.

More than the need to tie up with someone, I feel FIAT would be better served:
1. Hiring a top-notch management consultancy and revamping their dealership network.
2. Investing in wholly owned dealerships, one in each metro at least to set the bar for service.
3. Investing in a good advertising campaign, aggressive and objective. Ultimately, nothing like a good ad campaign to let indians know they are here to stay and allay consumer fears.

your point is valid my friend

All this is great, but the first thing is that they need to have the right product that the customer wants. Just because Palio works in Brazil dosent mean it'll work in India.

Wholly owned dealerhsips is a great idea. When TATA launched the Indica, they werent happy with the Truck Dealers who sold their Sierras and Estates....so they tied up
with Jardine International and launched the company owned dealerships (Concorde). After few years they were happy with the performance and so they privatized it. Great Strategy. Fiat was dumb not to follow it.

Fiat India is no more reprented in the parent comapany www.fiat.com

Fiat abroad seems to be having good cars in their line up..

Even i love fiat cars BUT their capabilty should be shown and not kept with themselves..

You have just joined this site i would request you to search FIAT in it and you will know what i mean.. we have been talking since when when and when but nothing seems to happen.. :Frustrati all talk no conclusion thats what is happening so is it not foolish.. so many fiat threads running into pages and pages and fellow memebers even mailing fiat, response from fiat but still nothing happens.. New Palio lauched outside india in 2003 and still india has the older version so after 2 more years when the outside version will be relauched then the older 2003 version will be thrown to indians. its high time fiat realises that India wont stay that way for long and we wont except such things..

P.S WHEN the hell will fiat make a site, its still not up how much does it cost to make one not even Rs.2000 Few weeks back enthusiasm saying site under construction how long does it take to make one.. It was not hacked says fiat dealers they are updating..

*cough* *cough*... if i am correct..your entry date reads april 2005 rl: .... and i am may 2005 .......

does posting more threads mean bieng older or something?? please:




P.S.: MOD' this is getting kinda personal...but sorry..i must reply to what this guy says.... and also...have a look at your optra post@motoya

Ouch! Thats really hitting where it hurts - considering that he allegedly spent close to a million bucks on that mistake, thats below the belt!

On another note, Monty was probably trying to avoid YET another FIAT thread - the count of FIAT topics on this forum is probably (looking at the sales figures on another thread, definitely) more than the number of cars they sell in a month...

The FIAT site should be up in 2-3 weeks time. A mumbai (andheri I think) based firm is re-developing the web-site. FIAT has arranged good infrastructure for the new website in terms of server/bandwidth etc. Apparently the link and mention of FIAT India was pulled out of FIAT's global site when the Indian site went defunct because they did not want a dead link.

Also, FIAT's new corporate campaign should be out anytime soon. Newspaper pullouts initially.

Separately,
unfortunate but have to agree with that.

Update on Fiat India

Fiat Auto SpA ups stake in Indian unit

http://www.indiainfoline.com/news/news.asp?dat=61284

Post the infusion, Fiat India will be fully capitalized with Fiat Auto SpA, along with Fiat India Automobiles Pvt Ltd. together holding a total of 99.83% while the stake of Premier Automobiles Ltd. will be diluted to 0.17%.

Thats a good news dude,
Seems Fiat want to get rid of Primier Automobiles. Hopefully things gets better for Fiat owners.

So,

1. New MD in place.
2. New / re-launches of models.
3. New corporate campaign due in a short while.
4. Website due to be up in a short while.
5. and now, some cash infusion.

things are looking good.

FIAT India really needs to come out with a proper corporate announcement of all these new initiatives.

OR we guys at TEAM-BHP need to be bloody paid for this lol:

I believe, news of fresh cash inflow for Fiat India deserved to be a separate thread :D

It is also covered by ET.

http://economictimes.indiatimes.com/...ow/1154057.cms

This is a good indicator that, Fiat means business and it is going to stay in India. I am surely going to "heavily" recommend Petra now onwards.

Separate thread? People are out to murder you!! :)

Atleast this news has made my day. For Fiat owners, any such news, however miniuscule it be, will be good to hear :)

When Fiat India says they are aiming at the premium market, what are they planning to say? Bring in Alfa, Ferrari and Maseratti to India?

Yep, I know. Steeroid has probably not yet read this thread.

But compared with all those speculative stories, this one has lot more substance and may be a serious step, which has potential to infuse fresh life in otherwise dying Fiat India.

I knew that was coming. But I must admit, this is the first silver lining I have seen on the Fiat India cloud in a long while. Good news.

GTO