[arjab]

Originally Posted by GTO

Do you think a line of entrepreneurs will line up at Fiat's door steps when it announces independent dealerships? No ways, especially not after so many went out of business only a couple of years back!! Remember, it costs the same $$$$ to set up a dealership for Fiat or for VW (just as an example).

@ GTO:
You are absolutely right. But there may be a way yet. There are still a fair number of businessmen in our country,who still view the FIAT brand with respect - possibly once upon a time they had pleasant memories of FIAT ownership.
The problem is these business folks are afraid to committ big bucks into a dealership or workshop.
Also you will find in most major Indian towns and cities you will find at least a couple of mechanics "mistri's" who are actually wizards at tuning / repairing anything automotive. Sure, they will not have a long line of alphabets alongside their names proclaiming their educational lineage - that's because possibly they had minimal education or none - but they will make it up in intelligence and sheer uncanny diagnostic ability - which is the basic ingredient needed to run a car repair shop.

So can a solution be found ? I think it can be worked out but bold , courageous, out-of-the-box-approach by Fiat and some very radical decisions are needed to implement it. It can be something like:
1) First priority is as i mentioned in my arlier post get the spares / spares logistics back end corrected becuase everything rests on this.

2) Set up a dedicated Fiat only dealer development team in North , East, West and South. At present Fiat's dealer development team is clubbed with Tata and nobody is able to solely focus on Fiat.

3) Identify in each Tier-1, Tier-2, Tier-3 cities persons /business folks/mechanics with the above mindset. This will take time but with perseverance and a lot of legwork this can be achieved.

4) Do not insist on huge workshop or dealer setups. Be realistic. Focus on efficiency for a dealership / workshop layout and not on grandeur. If its a dealership you are looking at and with the current Fiat range there should be space to park 4 cars inside and a little parking space outside. For workshops have 10-14 bay workshops. In fact having a slightly smaller workshop adds to the pressure on the workshop owner as he will insist on a faster turnaround time because all his bays are getting blocked

5) Now comes the crunch part for which bold decisions need to be taken.
For the above: offer to share with the prospective dealer proprietor, dealership or workshop infrastructure developmental costs.
People from Fiat, if they are reading this will possibly go white in their faces at this suggestion but this is the only way to build up the brand as well as ensure dealership's loyalty to the OEM. Costs can be shared as a loan at very low interests, as a loan with a target linked moratarium for 3years, as a soft loan with some riders such as if targets are achieved considerable part of the loan will be waived off etc.

I say these things because I had experienced these first hand as I used to work for an OEM and these are practical feedback from the field which i gathered across the country.

There are many businessmen who would still want to setup a "Phheeat-gaddi ki dukaan" .
It's upto Fiat to take things forward.

[mxx]

Originally Posted by GTO

It makes the most sense for Fiat to work out its existing relationship with Tata.

+1

And Fiat has to address their product's minor weaknesses if it has to take on the new competition.

I came across this article, it seems we are not the only ones pissed off by Fiat's attitude
Tata Troubled By Lack Of Progress In Fiat Alliance | The Truth About Cars

@arjab
Thats a long list of things you got there, but dont you think it will be easier if Fiat can recruit and specially train sales persons while sharing space in tata dealerships? The service personals are already trained by fiat. Why are they not able to keep up with customer expectations? I think they need to ask these questions and find solutions, before or while thinking of newer service/sales outlets.

[CoolFire]

Originally Posted by arjab

@ GTO:

1) First priority is as i mentioned in my arlier post get the spares / spares logistics back end corrected becuase everything rests on this.

2) Set up a dedicated Fiat only dealer development team in North , East, West and South. At present Fiat's dealer development team is clubbed with Tata and nobody is able to solely focus on Fiat.

3) Identify in each Tier-1, Tier-2, Tier-3 cities persons /business folks/mechanics with the above mindset. This will take time but with perseverance and a lot of legwork this can be achieved.

4) Do not insist on huge workshop or dealer setups. Be realistic. Focus on efficiency for a dealership / workshop layout and not on grandeur. If its a dealership you are looking at and with the current Fiat range there should be space to park 4 cars inside and a little parking space outside. For workshops have 10-14 bay workshops. In fact having a slightly smaller workshop adds to the pressure on the workshop owner as he will insist on a faster turnaround time because all his bays are getting blocked

5) Now comes the crunch part for which bold decisions need to be taken.
For the above: offer to share with the prospective dealer proprietor, dealership or workshop infrastructure developmental costs.
People from Fiat, if they are reading this will possibly go white in their faces at this suggestion but this is the only way to build up the brand as well as ensure dealership's loyalty to the OEM. Costs can be shared as a loan at very low interests, as a loan with a target linked moratarium for 3years, as a soft loan with some riders such as if targets are achieved considerable part of the loan will be waived off etc.

You ought to sit in Fiat board, arjab

IMHO the Tata partnership is and will always be a stop gap solution. Any car brand anywhere cannot grow significantly using the platform of a competitor in which it has not even a strategic stake. Yes, it will be painful, costly and slow, but they have to swallow the bitter pill if they don't wish to be overshadowed by Tata forever.

[aqualeo2040]

I believe that Tata Power is not enough to push Fiat sales. Although, it can sure be the necessary catalyst.

As a market, India is still very conservative and thus highly unforgiving.

They say, trust once broken, is very difficult to regain. And this is what is killing Fiat/Chevrolet etc.
The initial days of Fiat with PAL tie up was good. However, Fiat decided to take it slow and did not go on their own when they were still on the top of the game. Result : PAL failed and people blamed Fiat & family for it.

Fiat finally decided to go alone. But again mistimed it. got it totally wrong with the sales and A.S.S.
Then everything went quiet.

Fiat again re-emerged in the Tata JV.
Quite similar to the Chevy bandwagon as well.
There was Opel & Daewoo.
They were good cars and sold well. And then everything went bust.
Chevy took a real long time to come back. They were actually in a even worse situation with expensive and unavailable spares. Even today, the Opel spares are hard to come by and the Nexias are selling for 15grands!

The difference is the way GM came back. Fiat should take a leaf out of that book.
Spark & Beat makes quite a decent number. Cruze is rocketing the premium segment. How come GM got it and Fiat didnt?
Mr Kapoor is no Mr Slym. however, that Chevy promise worked wonder.

Why?
GM decided to launch their latest products in India and along came the CPCO. Good QC followed.
The A.S.S was taken care of. In Bangy, the primary GM dealer i.e. Sundaram Motors suffered from inflated ego syndrome. Now, I am sure not many owners take their car for service to Sundaram when they have Kropex & Trident in as well.

What Fiat also can do:
They already have a huge facility here in India. All they need to do is to up the QC and make india the hub of production for a few more models.
The locally manufactured models can be launched in India and the prices can also be kept low.(A la i20 : which was supposed to be primarily export oriented model).
Review the agreement with Tata to inject a non compete clause.
Stop the Palio and help Tata refresh the Vista badge. Come up with a lineup with existing portfolio of products which are good for both:
1. Nano (with 2cyl Fiat diesel)
2. Indicab (for commercial use only: The upcoming taxi industry has huge potential).
3. Vista Refreshed (with the 1.2 Fire/1.3 MJD 75ps)
4. Grande Punto (1.3 MJD 90, 1.6 MJD 120, 1.4 TJET).
5. Manza (Entry level sedan : 1.3 MJD 90 and 1.4 Fire 90).
6. Linea (TJET and 1.6 MJD/1.9 MJD).
7. Chrysler 300 with a bigger diesel heart
8. Update the existing Tata SUV lot with better engine technology.

Get rid of the old indica/ev2/indigo/Palio. They have served their days.
With a formidable lineup as above, supported by good QC and a few more A.S.S centers (most of them are decent, but they are always stretched to cope with the volume), the Tata Fiat JV can do wonders and take the competition by the scruff of their necks. We dont need more showrooms. We need more service centers for all these cars.

Ratan uncle expressing his displeasure or Sergio's response would not do much help here unless they decide to work with more synergy, grounds up with a more forward looking approach.Otherwise, we will still have confused sales guys trying to sell a Manza over a Linea etc etc.
The question is: who from Fiat/Tata is listening?

[motorworks]

Originally Posted by aqualeo2040

1. Nano (with 2cyl Fiat diesel)
2. Indicab (for commercial use only: The upcoming taxi industry has huge potential).
3. Vista Refreshed (with the 1.2 Fire/1.3 MJD 75ps)
4. Grande Punto (1.3 MJD 90, 1.6 MJD 120, 1.4 TJET).
5. Manza (Entry level sedan : 1.3 MJD 90 and 1.4 Fire 90).
6. Linea (TJET and 1.6 MJD/1.9 MJD).
7. Chrysler 300 with a bigger diesel heart
8. Update the existing Tata SUV lot with better engine technology.

I'm not of the opinion thta Fiat should get involved with Tata more than what they are doing today. Tata does not have a great record in servicing and if fiat distances themselves from Tata, then it would be better for them. Atleast in Bigger cities they should have their own show rooms and may have joint dealerships in smaller towns.
Tata has benefitted from fiat enough now and they have never given the importance these products deserved at their show rooms.
I remember when the refreshed palio was launched in 2007, I had gone to the showroom{concorde, bangalore} and the sales person just did not want to sell the Palio! My brother who recently bought a punto too did not have a good time when he took the delivery. He had to wait for more than 1 hour and the made the while thing look like a favor to him! Just look at Maruti dealerships, they deliver atleast 7-10 cars a day and they make the customers special about the delivery!
I personally feel that Fiat should create more awareness, that they are the company that owns Maseratti, Ferrari. Chrysler is not a very well know brand in India, so I dont see any image change for Fiat if it brings in Chrysler. It has to be marketing that Fiat has to re-work on. Products are great, the prices are too good too. It also needs an entry level hatch, could be the new palio, but they have to re-name it and give it an absolute superb launch.

[aqualeo2040]

Originally Posted by motorworks

I'm not of the opinion thta Fiat should get involved with Tata more than what they are doing today. Tata does not have a great record in servicing and if fiat distances themselves from Tata, then it would be better for them. Atleast in Bigger cities they should have their own show rooms and may have joint dealerships in smaller towns.
Tata has benefitted from fiat enough now and they have never given the importance these products deserved at their show rooms.
I remember when the refreshed palio was launched in 2007, I had gone to the showroom{concorde, bangalore} and the sales person just did not want to sell the Palio! My brother who recently bought a punto too did not have a good time when he took the delivery. He had to wait for more than 1 hour and the made the while thing look like a favor to him! Just look at Maruti dealerships, they deliver atleast 7-10 cars a day and they make the customers special about the delivery!
I personally feel that Fiat should create more awareness, that they are the company that owns Maseratti, Ferrari. Chrysler is not a very well know brand in India, so I dont see any image change for Fiat if it brings in Chrysler. It has to be marketing that Fiat has to re-work on. Products are great, the prices are too good too. It also needs an entry level hatch, could be the new palio, but they have to re-name it and give it an absolute superb launch.

Exactly my point.
If the teams do not have any product competing with each other a la Palio/Vista, we can avoid this scenario.

I personally do not think that the Tata A.S.S is that bad. The problem is that they sell more cars and the service centers are lesser. So, more pressure on these few centers to deliver more.

When I took the delivery of my car, almost the entire showroom was there (though that was least expected for the first car rolled out in the city).

I know about the Palio as well. I convinced my sis to go for it in 2008 and we had a few issues with Manipal motors. But the sales guy was pretty decent. I met him again at Concorde in 2010. Surprise surprise! He still remembers me eventhough I didnot get involved much after the TD!

A possible alternative would be to seggregate the SUV/MUV division & the Commercial div from the passenger car division.

[phamilyman]

There's another minor angle which needs to be considered. Entry costs in terms of deposit required for opening a dealership. that is humongous (upwards of 15 odd cr last i heard) for a sales outlet.

Fiat, if they breakaway - could let dealers cut down on this entry barrier. And allow spares on credit. They need to bend over backwards if they are to strike it out. It will be interesting to see how the manza and the vista fare if the MJD is taken away

[amitk26]

@familyman very important point , If the sales are miniscule no dealer will sink in 15-20 crores to open a dedicated showroom. Case of Nissan and Volkswagon is different because dealers bank on future growth . But FIAT is time tested and they know exact volume for last many years so can easily project the yearly revenue.

It is risky busniess I still pity the Komura Premier owner who took risk to open showroom for premier rio in Koramangla Bangalore and had to close down with in 3-4 months

Originally Posted by motorworks

I'm not of the opinion thta Fiat should get involved with Tata more than what they are doing today.

Well FIAT India is 50-50 Joint venture , I doubt if FIAT ( not FIAT India) has any big plan to sell cars in bigger number or they are satisfied with the revanues which components and engines bring to them.

Originally Posted by motorworks

Tata does not have a great record in servicing and if fiat distances themselves from Tata, then it would be better for them.

May be but FIAT had an even worse record . I really see no way they can redeem the dented image of bad service.

Originally Posted by motorworks

A
Tata has benefitted from fiat enough now and they have never given the importance these products deserved at their show rooms.

Again your tirade is against dealer , question is why dealer is not giving importance to FIAT product . It would be logical to think if selling FIAT is more profitable then he would push FIAT rather then TATA product.

Originally Posted by motorworks

Maruti dealerships, they deliver atleast 7-10 cars a day and they make the customers special about the delivery!

My experience with Maruti atleast in Bangalore is just opposit . The showroom is always crowded and there are so many buyers that it looks more like shop selling Diwali stuff,

In such a big crowd no special attention is given nor it is expected as you stop feeling like a king going to patronize the subjects when you are among sea of kings

May be all Maruti showrooms are not like that but that is my experience at Pratham while purchasing my BIL's car.

[motorworks]

@amitk26, do you think it's just the dealer and not TATA itself who are not giving the attention that Fiat cars deserve in their showrooms? Dont the dealers have to be accountable at some level to the manufacturer? Agreed this is a 50:50 partnership, but Tata controls the dealerships completely. I again feel that it has to do with Fiat's marketing strategy, which they did not very well at all. Look at the Manza, even a refreshed version gets so much of Hype!

[amitk26]

Originally Posted by motorworks

@amitk26, do you think it's just the dealer and not TATA itself who are not giving the attention that Fiat cars deserve in their showrooms? Dont the dealers have to be accountable at some level to the manufacturer? Agreed this is a 50:50 partnership, but Tata controls the dealerships completely. I again feel that it has to do with Fiat's marketing strategy, which they did not very well at all. Look at the Manza, even a refreshed version gets so much of Hype!

Advertising and promotion is one part which company controls but I was commenting on dealers promoting TATA product instead of FIAT.

From a dealers point of view he will push whatever brings more revenues or the stocks which move fast rather then piling up in yard.

[mxx]

Originally Posted by amitk26

From a dealers point of view he will push whatever brings more revenues or the stocks which move fast rather then piling up in yard.

+100. Dealers spend lot of money on dealerships, if fiat pays more margin per car, they would push fiats without doubt.

BTW, this talk about dealers seducing potential fiat buyers towards tata is too overplayed. I have been to different dealers(including tata's own concorde) with my friends who wanted to buy fiat several times. Never did the sales people lead or push us to consider tata cars. It might be happening, but not at the scale which it is made out to be.

[RavenAvi]

When Ratan Tata said in an interview last week that the four-year-old Tata Motors-Fiat joint venture "has not been as active as we had thought", he finally confirmed what the market has been quite vocal about for the past few months.

At the heart of the problem is Fiat's failure to bring in more models to India -- a fact the Tata Group chairman didn't forget to mention.


While the Tata Group still says it accords great importance to the strategic alliance with Fiat, analysts feel the main reason for the joint venture's indifferent performance (Rs 260 crore -- or Rs 2.60 billion -- loss in 2009-10 which is expected to increase for 2010-11), is its inability to improve its product portfolio.


Fiat's market share was less than 1 per cent last fiscal. In contrast, even Volkswagen, which entered India only in 2007, commands a share of 2.04 per cent.


Due to gross under-utilisation of its assets (50 per cent capacity utilisation), mainly the mega car, engine and transmission manufacturing plant at Ranjangaon near Pune, Fiat India posted a staggering cumulative loss of Rs 970 crore (Rs 9.70 billion), in a little more than two years.


Eight months ago, Fiat India Automobile did try to address the problem by bringing in a new team to revitalize its sales, marketing and distribution network.



But buyers are still not impressed with the Italian automotive brand.


Fiat sold 21,066 units in FY11, compared with 24,727 units the previous fiscal -- a decline of 14.81 per cent, and this came in a period of high sales growth for almost all automobile companies.


Since the appointment of the new team, sales of Fiat branded cars have dipped over 15 per cent to 13,446 units as against 15,874 units a year ago.


The fall in sales is in sharp contrast to the over 22 per cent sales growth achieved by the car industry in the same period.


Fiat presently sells three models in India, with one of them -- Palio Stile -- not available in the main city markets such as Mumbai, National Capital Region, Bengaluru and Chennai. Fiat executives say the sales number did not justify the upgradation to BS IV level.



Fiat's last model launch, Grande Punto, a premium hatchback, took place two years ago. While the Punto costing Rs 4.45 lakh, sells an average of around 1,000 units per month, much less than the targeted 2,500 units, the Linea, an upper mid-size sedan costing Rs 661,000, sells an average of 890 units, which is much below the 2,000 units per month targeted mark.


Under the 50:50 joint venture inked in 2007, the two companies are jointly working on distribution network and back-end support, besides co-manufacturing products in Ranjangaon. The facility has a capacity to produce 200,000 cars and 300,000 engines a year.


One of the steps that the JV had taken was that it re-approached some of its dealers asking them to change the way they market their cars. The plan included appointing separate man power and showroom space.


The new sales and marketing initiative demands further investments from the dealers. While some of the dealers welcome the change, many of them agree that Fiat suffers from a low brand recall in India leading to the lackluster demand.


"Fiat cars are not in the affordable range, they are at the premium end. Plus consumers also keep in mind the resale value of the car when they buy a vehicle. Fiat cars generally have a poor resale value compared to say a Maruti or a Hyundai", says a Mumbai-based dealer of Tata-Fiat cars.

But Fiat is hoping that the ace up its sleeve is the small car that will be priced below the Palio. At less than Rs 400,000, it is expected to compete with Maruti Suzuki and Hyundai Motors.


The car, which is currently under development, is expected to be launched by the end of next year and will sport a new 1 litre engine, the same configuration as the Maruti Wagon R and the Hyundai i10.


The new car, Fiat says, will go a long way to allay concerns over mileage of the existing cars in its portfolio.



Sources - Rediff, Business Standard.

[sarmarishi]

MUMBAI: Fiat India will overhaul its product and distribution strategy in an attempt to prop up falling sales. Top officials from its Italian parent have recently visited India to help the Indian management rebuild Fiats brand equity in the country.

The Italian auto major intends to launch a face-lifted Punto (hatchback) and Linea (sedan), which will be followed by a small car, people familiar with the development said. The Punto and Linea cars, part of the current portfolio of products, have been falling short of targeted sales numbers. Fiat spokesperson did not reply to questions on the subject.

For more please visit:
Fiat India to devise strategies to prop up falling sales - The Economic Times

Courtesy Economic Times

[fiat_tarun]

^^ This mentions that they are looking at separate showrooms and Tata Motors will still help with marketing.

Fiat India - please only give the Punto a interior facelift. It does not require an exterior facelift

Also came across this - Fiat may bring Sedici to India

This is a really good move if the news is true.

In what could be a turning point in Fiat’s operations in the country, the Indian subsidiary of the Italian car maker is mulling to introduce a car in the compact SUV segment. Among the options that the company is considering is to introduce certain modifications to its very popular compact SUV Sedici to suit Indian conditions. At present, Sedici is built by Suzuki Motors on the SX4 platform at its facility in Hungary. The car has been developed mainly for the European markets.
“Over the past one year Fiat has been considering several options for its passenger car segment. Getting its product portfolio right is critical. Fiat wants to have a model in the SUV space which would be fuel efficient,” a source privy to the discussions told FE. He said that either the company would introduce Sedici by making appropriate changes or would look at a “very similar product” within the same price range for the roads. He said the company was still in a discussion stage.

The Sedici was first showcased by Fiat in the 2006 Geneva Motor Show. Once introduced this would be Fiat's first offering in the B segment in India. A Fiat India spokesperson said the Sedici is not part of the company's business plans in India. He, however, refused to elaborate any further. A Maruti Suzuki spokesperson declined to comment.

FE had reported in April this year that the company's parent firm Fiat Group and its Indian JV partner Tata Motors has infused R150 crore into the company. The move was an attempt to wipe out the company’s mounting losses which had reached R290 crore in 2009-10 and introduce fresh models for the Indian roads. Fiat India’s spokesperson had said the money was raised to meet the company's short-term and long-term funding requirements.

Last week, Tata Group chairman Ratan Tata was quoted as saying in an interview that the company's JV with Fiat had to be critically examined. He said Fiat should come up with more models and reduce the cost of its spare parts in the country. He, however, ruled out breaking away from the JV saying that intrinsically the concept of the deal was healthy.

Apart from Fiat, utility major Mahindra & Mahindra is working on a compact SUV, which is likely to hit the roads next year. Maruti Suzuki is also said to be working on an SUV. According to Abdul Majeed, leader (automotive practice), PricewaterhouseCoopers, smaller SUVs could soon be in vogue owing to its cheap maintenance and lesser fuel usage. “Compact SUVs are going to become very popular in India because it appeals to the youth and is considered trendy since they are smaller and cheaper to maintain,” Majeed said.

[sarmarishi]

Originally Posted by fiat_tarun

^^ This mentions that they are looking at separate showrooms and Tata Motors will still help with marketing.

Fiat India - please only give the Punto a interior facelift. It does not require an exterior facelift

Also came across this - Fiat may bring Sedici to India

This is a really good move if the news is true.

I dont really see the Sedici coming cos its the hatch version of the SX4 which is sold by Suzuki. If I am not wrong Fiat is only allowed to sell the car in places where they do not have extensive presence/ or do not have the SX4. However, if they launch it before Maruti does, it may be able to take some share of the SX4 since people are aware of the SX4 and in its 4X4 avatar, its quite a car!