[motor spirit]

Fiat to deploy 3 key execs from Italy for JV revamp

The Financial Express (Web Edition)

[New Delhi: Fiat India, the maker of Linea sedans and Grande Punto hatchbacks, has undergone a restructuring of its board, with two directors leaving, three joining and another three getting extra responsibilities. The board-level changes at the loss-making company, a 50:50 joint venture between Fiat SpA of Italy and Tata Motors, are seen as a prelude to a planned restructuring of its operations.

Giovanni Bartoli and Harald Jakob Wester have stepped down from the company’s board. Bartoli’s exit is seen as significant since he is No 3 in Fiat SpA and one of the seniormost board members of Fiat India. Fiat SpA has nominated Ezio Barra, Giovanni Sella and Silvia V Blina — all senior officials at the company’s Turin headquarters — to take their place. Gianni Coda, Alessandro G Baldi and Alfredo Altavilla, who are currently serving on the board, have been given additional responsibilities.

A company official said the changes aim to bring greater synergies with the parent firm. “This is the first major reshuffle since the company started its Indian operations in 2006. Fiat has a plan for the Indian markets, which has not taken off. Perhaps the board reshuffle will bring like-minded individuals to chart the company’s course in India,” an official said.

Fiat India’s troubled Indian journey found mention in a JD Power interview with Tata group chairman Ratan Tata last month. Tata indicated to the market research firm that the five year-old JV had to be critically examined, adding his good personal rapport with Fiat CEO Sergio Marchionne had not translated at a company level.

“...I have to admit that so far, the venture with Fiat has not been as active as we had thought,” Tata had said.

This year, Fiat India invested Rs 150 crore in the company by issuing fresh shares, in an attempt to make good part of its 2009-10 losses of Rs 290 crore. Deepak Dalal, a Delhi-based automobiles expert specialising in corporate restructuring said that board rejigs often infuse new life into a company. “There are several examples in the West of companies undergoing major board reshuffles to bring about a turnaround in operations,” he said. Dalal added that board members play a critical role in making key decisions. “If they are aggressive, it reflects in the company’s operations as well,” he said.

An email sent to Fiat India’s spokesperson on Monday did not receive any response till the time of going to press.

A senior official of a European car maker which competes with Fiat abroad said the Fiat board recast is expected to empower the company’s India’s operations. “Unlike in other single-owner companies, in a JV, the board plays a very critical role. It also speaks about the fact that Fiat is still committed to the Indian market which augurs well for the industry as well,” he said, requesting anonymity. In 2010-11, when the Indian passenger car sales grew 30%, Fiat India’s overall sales declined 15% to 21,066 units against 24,727 units in the previous fiscal. Fiat India has one manufacturing facility at Ranjangaon, near Pune.
http://www.financialexpress.com/news...evamp/813226/0

[arvi86]

I am just deeply worried to see Fiat in this stage in India. After all, this is a company which, along with Hindustan Motors, put the entire nation on wheels. Even now, people recall Premier Padminis as Fiats. Its a real shame that a company with such an heritage and legacy in India, even with a brilliant line-up of current models in the form of Punto and Linea, could still not taste the success that it really deserves. The Grande Punto, which helped Fiat's resurgence in Europe, sadly could not do much in India.

Let's just hope that the newly reshuffled board and management at Fiat India do something to change the fortunes of the company drastically. They should first come up with a marketing blitzkrieg that can touch the hearts of Indians and make them reconnect with the vintage Fiats that most Indians have a soft corner for. Go Fiat, go!

[FanaticOnWheels]

They need dedicated dealerships and service networks. They fail to understand that. This JV with Tata is going nowhere as far as I see it.

[StarrySky]

Originally Posted by FanaticOnWheels

They need dedicated dealerships and service networks. They fail to understand that. This JV with Tata is going nowhere as far as I see it.

It's not about Fiat wanting dedicated dealerships - how many businessmen will be willing to put money in an exclusive Fiat dealership at this point? Let me assure you, there are no fanboys among businessmen (for any product, for any brand). Fiat needs to generate volumes for which they need a distribution network as wide as Tata's. So they need the JV. Till Fiat cars start to sell in decent volumes the joint dealerships is the only way for Fiat. I am happy to see Fiat take significant steps to strengthen the JV.

[julupani]

Till FIAT establishes itself as a quality carmaker, they wont be able to come out of the old ruts. For that they need to be bullish about the market and be ready to make necessary investments to bring in a bigger product range.

[CARDEEP]

^^ IMO fiat is slow but it is trying to gain better foothold. There are unconfirmed reports that it is planning to launch a new small car & CBU for the Indian market.

Here is the Motoroids article on the same:
http://motoroids.com/news/fiat-confi...for-india.html

[RakishRam]

Here is some action from Fiat. New VP, an Italian Vendor.
Source

The move to bring an Italian to the top management stems from Fiat's desire to align the Indian operations to the global brand. "It was felt that an Italian would help in better global brand positioning and in aligning the Indian operations with the global operations soon.

[figo_mba]

Just when things were looking up for Punto, Fiat has taken off most of the freebies and offers.

It now costs 7lakhs OTR for a Punto EPk in kerala.

Is there a strategy here or are they just shooting in the dark ?

[aaggoswami]

Originally Posted by CARDEEP

^^ IMO fiat is slow but it is trying to gain better foothold. There are unconfirmed reports that it is planning to launch a new small car & CBU for the Indian market.

Here is the Motoroids article on the same:
Fiat confirms a new small car and CBU for India

Will that help ? If cars like GP and Linea could not help, are you sure that the small car will help ? And CBU ? What are they planning to sell ? GP and Linea owners have at various times reported spare part issues, then what will happen in case of CBU ?

Originally Posted by StarrySky

It's not about Fiat wanting dedicated dealerships - how many businessmen will be willing to put money in an exclusive Fiat dealership at this point? Let me assure you, there are no fanboys among businessmen (for any product, for any brand). Fiat needs to generate volumes for which they need a distribution network as wide as Tata's. So they need the JV. Till Fiat cars start to sell in decent volumes the joint dealerships is the only way for Fiat. I am happy to see Fiat take significant steps to strengthen the JV.

Fantastic point. I agree with you that there are no fanboys among businessmen. Volumes are necessary. And for volumes, Fiat first needs to get its image straight. Going in for Tata-Fiat joint dealership was a sure shot failure.

IMO, without volumes, they cannot escape Tata dealerships. On top of it, nobody will plunge to become Fiat dealer without volumes + better image.

Its a vicious cycle into which Fiat is in now. The moment they went in for those Tata shared dealers, I was sure along with many that Fait will end up losing quite a few loyal customers.
My friend who has palio is having issue for spare parts ranging from Antenna to ORVM to rim cover.

And I am not sure if those Italians will help any further. They need Indian management and they must work in deeper coordination with Indian management if at all they want to survive in the Indian market. This coordination is rather seen lacking from what we read about ownership experience of Fiat cars.

[julupani]

Originally Posted by aaggoswami

Will that help ? If cars like GP and Linea could not help, are you sure that the small car will help ? And CBU ? What are they planning to sell ? GP and Linea owners have at various times reported spare part issues, then what will happen in case of CBU ?

Are you thinking the fortunes of FIAT will turn over night and they will become a big volume player???

The small car and the CBU are definitely the right step. The idea for FIAT right now should not be on generating volumes overnight, rather on rebuilding the image of a good solid car maker. More than the small car, the CBU is important , because that will help build the image. With the small car they can generate a couple of thousand units of volume. But they have to keep those customers happy.

The spare part issues will always exist for cars that arent generating a lot of volume. Dealers dont want to keep stock of many parts and thus when they are required it takes a bit of time to get the whole process completed of obtaining particular parts from the regional depots. Also Tata's supply chain isnt exactly the best out there. But because Tata volumes are high enough, dealers dont mind maintaining decent stock.

But over all I think, the existing small set of FIAT customers are a pretty happy lot. Its just that the perception of bad service quality, compounded by the not so great reputation of Tata service, accentuates and blows out of proportion every minor service issue.

If a Maruti service issue happens, people tend to shrug it off as a one off thing. While any service issue of FIAT, due to its history, takes off on a completely different angle with every body concluding that the service quality is completely rubbish.

[carboy]

Originally Posted by FanaticOnWheels

They need dedicated dealerships and service networks. They fail to understand that. This JV with Tata is going nowhere as far as I see it.

They had dedicated dealerships & service networks earlier. But that didn't work. That's why they tried the JV with Tata.

[julupani]

Just to add, wish the new small car gets the super 875cc I2 Multiair Engine from FIAT. The 18+kpl from an 80+hp petrol engine should definitely bring a few customers into the showrooms. If they can do this, and keep the price around 4.5lakhs, the Hyundai i10 will surely take a decent hit. The mileage figures of the MultiAir would mean the FIAT will give highway sort mileage in city conditions, while giving Alto kind of mileage on the highways.

MultiAir engines should definitely be introduced across the range of FIAT, as the present FIAT petrol engines are a bit low on the mileage front, while not being high on the power front. The MultiAir engines should solve both problems.

The Linea definitely needs the 100hp 1.4L Multiair petrol engine. May be even the Tjet can get the turbo version.

[figo_mba]

Originally Posted by julupani

The small car and the CBU are definitely the right step. The idea for FIAT right now should not be on generating volumes overnight, rather on rebuilding the image of a good solid car maker. More than the small car, the CBU is important , because that will help build the image. With the small car they can generate a couple of thousand units of volume. But they have to keep those customers happy.

CBU is going to aggravate the already spare part problem. I think the lead time on the parts are going to increase. Instead of CBU they should concentrate on improving the quality of the suppliers and probably move from traditional TATA suppliers.

Originally Posted by julupani

The spare part issues will always exist for cars that arent generating a lot of volume. Dealers dont want to keep stock of many parts and thus when they are required it takes a bit of time to get the whole process completed of obtaining particular parts from the regional depots. Also Tata's supply chain isnt exactly the best out there. But because Tata volumes are high enough, dealers dont mind maintaining decent stock.

Unlike Maruti and even Tata, Fiat does not offer credit for spares and so the dealers will not stock more spares. Also as you have said for Maruti dealers would stock spares in the anticipation one among the million cars will come for them. As for fiat, there is no anticipation and no credit. meaning dealers have to fish out cash for the spares and if they do not go off the shelf means inventory costs are higher.

Originally Posted by julupani

But over all I think, the existing small set of FIAT customers are a pretty happy lot. Its just that the perception of bad service quality, compounded by the not so great reputation of Tata service, accentuates and blows out of proportion every minor service issue.

I think that statement might not be true. I have Linea and I really don't want to start talking about the problems here. Bad service is also part and parcel of the package everyone buys from the car company.

Originally Posted by julupani

If a Maruti service issue happens, people tend to shrug it off as a one off thing. While any service issue of FIAT, due to its history, takes off on a completely different angle with every body concluding that the service quality is completely rubbish.

This is true. If Maruti has a problem then it is one in million (literally) and when a Fiat has a trouble then it is one in a thousand. just joking.
I really agree sometimes this happens. I think this is because when people buy a fiat they really expect a lot more than what is delivered.

I like a fiat for the ride and the driver appeal but that is not everything. Isn't it ?

[Klub Class]

Please excuse me for the post.

Originally Posted by figo_mba

Just when things were looking up for Punto, Fiat has taken off most of the freebies and offers.

It now costs 7lakhs OTR for a Punto EPk in kerala.

Is there a strategy here or are they just shooting in the dark ?

It seems like you haven't read about the Get diesel at the price of petrol offer(?)

For the record, Fiat is offering :

• Car Upgrages
• Free Fuel Voucher
• Savings On Car Insurance
• Free Road Side Assistance
• 100 lucky guys will be getting either petrol worth Rs 54k or Diesel worth 26k.

If you're interested to read more, here you go : Fiat Upgrade Offer

[figo_mba]

Originally Posted by Klub Class

Please excuse me for the post.



It seems like you haven't read about the Get diesel at the price of petrol offer(?)

For the record, Fiat is offering :

• Car Upgrages
• Free Fuel Voucher
• Savings On Car Insurance
• Free Road Side Assistance
• 100 lucky guys will be getting either petrol worth Rs 54k or Diesel worth 26k.

If you're interested to read more, here you go : Fiat Upgrade Offer

I thought that was an offer for the people who "BUY A FIAT" and then win some lucky DRAW.
In this I was talking about the buying part. It is costing 7L OT for Punto 1.3MJD E pk. The free insurance is replaced by 50% insurance.

Now why is that just when Punto started selling better, Fiat took out most of the offers available and introduced a lucky dip.