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|10th September 2010, 13:29||#1|
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Tata Fiat passenger car JV-the way forward
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(Disclaimer: This writeup is strictly NOT MEANT to market or promote Tata/ Fiat products or their services, but are just my views and perceptions based on the JV's performance. Perceptions and arguments may or may not differ and constructive criticism is always welcome. I will not be responsible if anything mentioned is adopted and the results can turn out to be less than steller. And, fan boy posts are a strict no no.
Billboards clicked by me and changed to avoid any marketing or promotion of the ad agency.)
Yesterday, while traveling by Delhi Metro, I was just amazed by these billboards that they placed to increase brand visibility. It may be deemed ridiculous, but I couldn't stop myself from clicking and appreciating the effort done. 360 degree approach is what a consumer looks like when he goes to purchase any product/ service offered. Whether it costs just 10 rupees or 10 lakh rupees, value, brand and perception counts.
With Fiat, sadly, the aforementioned three cases work against it. Even after 15 long years (from uno days till today), fiat hasn't really tasted success in the Indian market, no matter how much we can sit under the dark eye of false claims that it makes that we need time..we are stable etc etc. The ground reality remains dark that fiat is not able to sustain itself in a market which has just exploded last month. All companies have shown growth and its only this JV that saw its sales tank off. And Fiat, more so to new low of 1800 odd units. Its major European arch rival, volkswagen, which only started operations this march, almost doubled its lead in excess of 3300 units sold. And Fiat just cannot commit despite having just two models for sale.
Now the point lies here:
Sadly, Fiat thinks exactly the opposite of this. the money invested is a colloseul Rs 4,000 crore and despite having turned a profit, the initial cost and utilization of plant capacity to its fullest is not yet achieved. Now therein lies the problem.
What Fiat needs to understand is the importance of a brand. Yes, product counts, but its the brand ultimately that delivers the end product to the consumer.
Now when we analyse Fiat cars, they have three USPs
And than there was this rumor on a news channel that the JV is considering a split, which (thankfully) proved to be wrong. It took Fiat 4 and a half gruellng years to set up a sales and service infrastructure an that too after begging at tata's doors in March 2006. Before that, the company was in a verge of extinction. Today it has set up a network of 175 dealers and service centres. To all fiat owners, I ask you one thing-what if this JV is dissolved and all 175 dealers terminate their contracts? Where will you go and beg for spare parts?
Now having numbers is one thing and executing those numbers is a different ballgame altogether. 175 is a very good number and if executed properly, would do wonders for fiat in the long term.
Fiat suffers from three major problems-
Now when anyone goes to a fiatata showroom to buy a fiat car, the salesperson themslves ask them to buy tata cars. Why? same mechanicals at a lower price is what they say. And what about fiat? Its expensive, less VFM, bla bla bla...actually the pofits per unit sold in tata brand is much higher than that of a fiat.
And the dealership cares a damn about the so called enthusiasts and the same is noticed whenever any fiat owner takes his car for service. Long wait, indifferent awful attitudes, lack of parts availability, poor quality of labour work is all that the have to face.
Their fault-spnding a big money on a car which is supposed to be reliable and trouble free. Whats the point of advertising the 50 month warranty, 50 month roadside assistance and 15,000 km service interval when despite improvements shown, you are not able to deliver a considerable percentage of positive improvement in the quality?
Now coming back to sales-the dealership is so confused (I have mentioned this elsewhere in another post in a different thread) about what to sell and to whom to sell.
The main reason-enormous number of variants, some really unnecessary.
The passenger car range has (all variants are BS4, BS3 variants are mentioned in italics):
tata nano (BS 3 and BS 4)
Tata Indica V2
So, whats the way forward? My request-REDUCE the variants and prun the non selling variants.
Lets start with tata.
Seriously, why drag on the 13 year old indica V2 and cannibalize the sales of vista? Yes, its dirt cheap but the thread shows that consumer looks for value and positioning, not price. es, it sells in bulk for the taxi market but again, why make the old turbo BS 4 compliant and drag it on and on? tata, its time to draw curtains on the indica and concentrate on the vista.
the vista TDI can be positioned in the taxi market since a mint white colour is offered with it. All the values of indica, only bigger and better.
And if tata is concerned about volumes rather than the image, then why not promote it? 5 variants pruned, only easy to sell and target the right consumer. the vista TDi would make a great product for commercial taxi owners. If you wanted to wipe off the taxi image of viats, why offering white shade in that? accept the truth that whatever be the image, you need volumes to earn profit and recover development costs of the vista. Which you haven't till now.
The vista QJD and safire should be targeted at private buyer. And each engine option has 5 variants, of which only terra and aura mid level sell the most. The aura abs and aura plus should be there for safety conscious buyers, no harm with that. But why just one additional variant only for dual airbags? My suggestion-let the aura plus be as it is, add ABS to "normal" aura and remove the stereo from it. the price increase over the marginal aura even if it is just Rs. 10,000 it would make for a great VFM purchase. The blue 5 and USB aux-in stereo can only be reserved for aura plus models. one variant each pruned, again much easier to sell.
USP: Mass buyers who want VFM confort, economy, space and comfort at a cheap price. target competition-the swift, ritz, beat, figo, i10 segment (petrol and diesels included)
So the line up will have
Indica vista (taxi plus public)
Now what about fiat?
Fist and formost, do we really need a punto 1.2? whats the point if its doing no wonders to the company? the car has nothing really unique about it in terms of engine, performance and poor mileage of just 9-11. Performance of 0-100 in 19 odd seconds? jeez, the cheaper i20 will leave you embarrased.
The 1.2 punto is also dangerously cannabilised by its stalemate, the vista safire 1.2. same mechanicals at a lower price. Only a miniscule go for the "fiat brand value". But why fiat? don't you want decent sales figures?
And secondly, whats the point of having a punto dynamic when it doesnt sell at all? ever since it was launched, the active and emotion are bestsellers. The dynamic-I have only seen TWO on the roads. Who will pay 35 k extra just for rear power windows, useless manual central locking and "unnecessary" features like a decorative silver finish console and pillar blackouts? No one.
And the 1.4 petrol? How can it be improved? Reduce the peak power rpm and alter the gear ratios. the 1.4 owners have in general not complained about mileage and are generally satisfied with the overall performance of the car. The gearbox is just absurd and more closer ratios will optimise performance and mileage altogether.
Moreover, the punto interior just sucks big time. Awful plastics in a supposedly "premium hatch" and a garish grey colou scheme only adds to the cheap feeling. The plastics need a drastic improvement, and kindly copy paste the linea's black and beige colour scheme. it will look very upscale and will deserve the quality worthy of a hatchback that is positioned to compete with the i 20 and the polo.
The emotion variant comes with a CD player. whats the use of it in today's age when sound quality is just awful and even a cheaper santro offers USB an aux-in elabled stereo as an option on its GLS model? My suggestion-remove the stereo and bring down the price by 10,000 or keep the price same and improve the interiors, road noise, refinement and overall finesse. We would prefer aftermarket audio unit.
Same goes for punto diesel. Why offer the 75 ps FGT version when theres the vista to take care of it? Moreover, the 90 hp version is actually more fuel efficient an overall an infinitely better engine than the FGT vesion, despite just marginal improvements in performance and the turbo lag. It needs to be tuned properly and close ratio gears are needed. Thats all. Again, the 75 hp punto should be replaced by 90 hp punto across all variants. So effectively 4 variants pruned in total and all other improved. Now, after all the aforementioned improvements, I would like to see this:
Moreover, since the 1.4 petrol is offered in the manza, get the 1.4 t-jet across all the linea variants as a PRODUCT DIFFERENTIATOR.
The active and dynamic hardly sell, its only the emotion and the emotion pack that sell the most. 2 variants for each engine option is more thn sufficient if there is intra competition with the manza. 4 variants will do nothing good. My suggestion-phase out the active and dynamic, remove the stereo from emotion (and alloys from emotion petrol) and rename it as dynamic. Overall finesse, altering of gear ratios and more reduction in NVH levels is definitely required to make the linea an overall a better product.
So, the lineup for fiat linea to compete with the vento, SX4, verna and city can be:
fiat owners complain about the poor attitude of service persona, inconsistent availability of spare parts and second rate treatment to fiat owners. Why the hell is it? haven't we spent our hard earned money on tour product that we have to run fro pillar to post for even a basic level of service requirement? and why don't service advisors take pride in fiat cars? just shame on them. And at showroom, the dealers need to have a seperate space for exclusive fiat customers, and a staff dedicated ONLY TO FIAT who knows what he sells and should be confident enough to sell a fiat to a fiat-ian. Moreover, please make an effort to increase supply of spare parts and motivate dealers to order and stock them. A customer has to run for even a basic spare like an oil filter, wiper and indicators.
The fiat advertisings have been cheesy at best, especially for the punto. the latest ad is just pathetic. An ad like this highlighting the punto USP
Would greatly enhance the car buying experience. Lifestyle, sporty, youthful, the fiat brand signifies this.
Signature stores and 500
The fiat 500 bombed.
Its a great product. When VW can sell 350 plus 12 year old "new beetles" why can't fiat move the 500 of showroom floors? My suggestion-re launch the 500 with a 2 cylinder turbo multi-air petrol engine as its USP and sell it ONLY through the signature stores, initially in Delhi, Chandigarh, Calcutta, Bombay, Chennai, Hyderabad, Bangalore and Ahmadabad. The fiat exclusive signature stores should also stock other lifestyle products (like I have seen in EU), accessories and other merchendise. Only allot to these who are committed to deliver the best. or make it company owned.
Fiat had 3 chances, all three failed. yet the company looks committed. It just needs the right policies from the right people.
The new model line consisting of:
Fiat Linea 1.6 MJD and 1.4 T-jet
Either company wake up before the competition says "Tata" to you and Fiat altogether.
Last edited by GTO : 2nd May 2012 at 21:14. Reason: Adding link to new thread
|10th September 2010, 14:01||#2|
Join Date: Dec 2009
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Excellent Analysis Sid .
I some where Agree with your product Analysis . No point in having 2 products in same showroom , vying for Customer attention.
Being a TATA / FIAT fan. I has to agree 200 % with your Analysis with respect to Spares / Cust service . Everything In case of FIAT is perfect. They have Great car's , which offer everything a buyer looks for but they still fail to sell, due to their Dealers / Spares / Service issues .
Given the kind of feedback, i have seen on T-BHP, The Upper management In Fiat is pretty serious about delivering world class service to the End user, but some where in the Middle Management , People just don;t care . I really have no visibility how dealers are selected and i am more than 100% sure, that dealers can be pulled up for better service ( legally as well as Physically ) but than there has to be a flair for customer service in the guys out there attending to customers. you can teach them everything , when it comes to customer service, but you cannot force them to practice that and this is what's is happening. TATA's / FIAT guys are calling dealer staff to factories for such lessons , but for dealers staff , this is a On job free paid holiday with no seriousness to learn some thing about customer service.
So, i guess it;s high time now for TATA's/fiat's to start taking the stick out and beat the hell out of dealers for Wrong customer service and if required, terminate the dealer. they have Enough deep pockets to keep the dealer ship running.
Set Such 1 or 2 examples and rest will fall in line themselves .
|10th September 2010, 14:35||#3|
Join Date: May 2008
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As the Two Companies are re-working their synergies. I dont see any point of this thread / discussion.
Both the companies are getting benefitted from this JV. TATA is getting the Technologically advanced Diesel & Petrol Mills & FIAT is getting TATA's wide spread Sales & A.S.C across india.
Let them come out with the strategies, how they wish to stop the cannibalisation of the Products in the same showroom. And the plan to take the JV forward smoothly. IMO, it would be better to comment on the same once they are out with their strategy.
Last edited by sharma_sanjeevi : 10th September 2010 at 14:41.
|10th September 2010, 14:49||#4|
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Sid TATA-FIAT need to make you an offer to join. Being a Marketing professional can clearly appreicate almost all your points. It is roughtly what I would have suggested as well. Most of it is actually CS Law (common Sense) but this is always in short supply.
The only area of minor disagreement is on the bit about having ABS without deck as a variant, somehow Factory fitted Decks are good to have - better quality is always appreciated. They could keep only the version with both the deck and ABS and do away with the version without ABS in Aura.
They should introduce the Fiat 500 at a price point of 10L. make no money on each and get 1000 units on the road as a marketing gimic.
Last edited by ACM : 10th September 2010 at 14:51.
|10th September 2010, 15:03||#5|
Join Date: Jul 2010
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Well written article Sid. A few days back, my dad said the same thing. Fiat is crazy by not discontinuing the 76bhp MJD Punto and instead is not offering discounts on 90bhp and it comes in just one variant- E pack. Bringing 90bhp in all four variants would further add to the confusion. It is best to discontinue the 76bhp FGT.
(Why are you worried Fiat? If you have lesser profit in 90bhp, so what? In the end it's your call but isn't success more important than profit during the initial phase of your growth?)
I differ from Sid only on two things:
1. TATA Vista should not be launched in the taxi market. It won't be good for it's "image". Instead, keep Indica for taxi market only and Vista for normal market.
2. Removing integrated HU from Emotion pack-No. This will spoil the looks of the center console (already plastic quality is not inspiring). Even a Rs250 FM modulator has a USB port and a remote. Fiat should add USB to Emotion and an IR Remote can be added as well.
Aftermarket HU's invite more thefts as there is no security code in them. Integrated HUs become useless if stolen on the other hand.
FIAT SHOULD LEARN THE FOLLOWING:
1. Offer freebies on 90bhp as well (insurance+extended warranty+roadside assistance). Why are you offering these on 1.4 and 1.3FGT but are not willing to offer it on the top most variant that you want to promote.
2. Learn to highlight what Punto is hiding inside. Ask anybody anyday, and you will find that people think that i20 Asta has more features as compared to Punto Emotion Pack. I'm talking about your brochure Fiat. Many Features come to light only after buying the car.
Sales Manager can not show all the features at the time of test drive. It is the brochure that will do all the talking.
3. Your Sales Manager do not talk of exclusive features. The one I dealt with at Joshi started with the following, "It has 15k service interval, see the design of rear view mirrors. It's from Ferrari. It has all four power windows, power mirrors... and so on..." Every other car has 4 power windows. I wasn't interested in that.
He did not press the Blue&Me button even once to make me interested.
I had to do this while my father was test driving a Punto, to show a talking car to my parents to make them more interested in it instead of i20 from "Hyundai".
So far, I've received 4 calls from Fiat and I've talked of all this in my feedback. Fiat continues to have that stripped down brochure. Not that I should be able to influence them but what was the purpose of those calls.
4. Do not attempt to discourage people from lower variants by eliminating features that are dirt cheap and hope that they may opt for higher variants. e.g.
Punto Active: add manual central locking. Add silver color to the center console.
Punto dynamic: It does not have any demand. Why not discontinue it. Even Sales Manager highlighted that it's a waste of money just for power windows and manual central locking.
Moreover, at least add control switches for all 4 windows on driver side.
Punto Emotion: Add USB and Auto AC. Lack of Auto AC in Emotion is not a temptation for Emotion pack. Customer instead goes i20 Magna or Sportz that has Auto AC even in magna and USB in i20Sportz.
I've myself seen someone reject Punto Emotion 1.3MJD as he was demanding "USB port from Emotion pack" (Customer wasn't aware that USB is integrated in the Blue&Me box and not the HU)
Last edited by PaddleShifter : 10th September 2010 at 15:19. Reason: formatting improved
|10th September 2010, 16:13||#6|
Join Date: Oct 2005
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Well writtened point to point analysis by sid. as a owner of mjd E pack from last 3months, i have not experienced sub standard or careless attitude by concorde service people, Burnt fuse box, door lock assembly, has been replaced under warranty within 5days, on last monday Blaupunkt HU replaced under warranty on exact 6th day from ordering date, i think it's minimum lead time required for rare product procurement. [off course, they have to stock regular spares]
What i observed all these days are they are very much worried about scoring highest points, after serving the satisfied work, they request me to rate them highest possible score on feed back calls form fiat, 15minutes back i got a call from fiat international the person at other end speaking in italian style english, saying they need feedback on product.
Is the FIAT thinking seriously on After SS?! Hope so..
Last edited by subbarao : 10th September 2010 at 16:18.
|10th September 2010, 16:47||#7|
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Location: Navi Mumbai
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Good structured Analaysis
Sid, how i feel you are in so much love with FIAT cars You have nicely outlined the way FIAT needs to market their cars. Something that the marketting team is deeply missing out here.
Well only the paper print of the JV will tell us the real picture why FIAT is failing to brand its USP.
Since the service as well as the Sales is also handled by TATA, guess the more blame is towards TATA's end. Some constraints FIAT is having publicizing its products.
Ever wondered with its own Diesel engine which is now the National engine, they have never proudly displayed its USP, not even a mere punch line to boast its their engine which gives the best mileage out here!
Sales are dipping and we still do not see a strong marketing to revamp the sales!
Something is holding back FIAT and only when it stands on its own feet, we could see the Video as you attached in real some day. Sigh! Only if it realizes its too late now..
|10th September 2010, 16:54||#8|
Join Date: Jan 2010
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Too similar a thread
you might wanna merge your thread with this one.. Its got alot of value in relation to the topic you have picked
or, you could merge that one with this! (Rajnikanth Style )
Last edited by acidkill : 10th September 2010 at 16:58.
|10th September 2010, 17:02||#9|
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1. Few of the points are well pointed out. Its obvious for 2 major car companies to have product overlap, specially when both of them are at low and mid segment. There is no new discovery in this fact. FIAT is not at all a company selling >15L cars to avoid overlap. At times I wonder why the board is introducing newer overlaps day after day. Vista and Manza now sport same engine, same features, more space, less price, faithful sales executives to highlight these things and FIAT sales is bound to go down.
Probably the margins on the FIAT are not good so the dealers are discouraging people to buy FIAT. After all, they are not bound to sell any fixed no. of cars I believe. I guess FIAT Italy should really take a keen interest in this JV and see if the other partner is not taking them for ride. Though TATA has invested money into JV, they are getting facility-Infra + technolgy for this. When you are in the same market segment, you should be extra careful. I guess FIAT management really needs a make over now.
2. My personal opinion, its high time they need their own sales channel. You can not expect people to buy Linea when Manza offers the same thing. Service center will be shared but then at least have different showrooms. Probably on the lines of what Sid saw in Europe. Keep couple of cars in the regular showroom but then have a separate in vicinity.
3. I am a FIAT customer since 2005 (Palio) but I have never faced any issues with the service. BUB is doing a nice job in Pune. Those guys have separate advisers and technicians for FIAT. Probably having a technical lead from directly from FIAT would help matter and help customer gain confidence. TATA-FIAT should make a compulsion of storing few parts at the dealer. The very known FIAT dealer in Pune is now a VW dealer, I am interested on the dealer feedback from the VW guys on the forum.
4. Though the plastic quality is not very good in Punto and Linea, I feel people blow it out of proportion. I have seen this everytime that they cry about the quality and compare it to sub 3L cars. Pure exageration I guess. At least, my car does not rattle with so called premium feel plastic quality.
EDIT: Got this link on YouTube. Courtesy to the respective owners of the video.
Last edited by neoonwheels : 10th September 2010 at 17:22.
|10th September 2010, 17:45||#10|
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Replacing the FGT engine with the VGT mill will make the MJD version dearer by 30K, and that will adversly affect the sales IMO; at least for the initial quarter. What's more, Fiat is actually downgrading the specs on a month-by-month basis, let me say.
Consider Punto for e.g.:
- for the Emo variant the tyres were down-rated to 165/80 R14 in last month.
- the BLAUPUNKT brand name is not there in the current EP' HU, although the HU is the same I am told.
- the B&M decal is a INR 250 accessory for EP.
Considering these facts, one should doubt that FIAT is trying to save paper/printing charges for their brochure by making it concise. That must be the reason why the brochure is silent about at least 50% of the features.
Just my 2c.
Last edited by sandeepmdas : 10th September 2010 at 17:47.
|10th September 2010, 17:53||#11|
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|10th September 2010, 17:56||#12|
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1.2 should be discontinued. Those variants make absolutely no sense. In fact, going by the FE figures posted by owners : the 1.4 is as fuel efficient as the 1.2
|10th September 2010, 18:15||#13|
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My dad's FGT is not even a month old, yet I said that even FGT can be discontinued so that there are no more accusations to the Punto in the name of underpowered engine if VGT is standardized across all variants.
My opinion is based on the fact that a common man does not find dynamic to be VFM. All one sees is that there are rear power windows but still only two switches in front. A manual central locking and instrument panel light regulation for 30-40k extra. I talked of dynamic to my dad as well but he, like all others, went in favour of either Active or Emotion.
I asked for dynamic's availability with four dealerships. Not even one of them was willing to book it because in case I refuse it later on, they may not find another buyer easily.
Last edited by PaddleShifter : 10th September 2010 at 18:18. Reason: typo
|10th September 2010, 20:51||#14|
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Very well written article sid. There is no doubt in the fact that Fiat needs some serious rethink and moving out of the JV will be just suicidal. I can think of following:
1. Have a clearly segregated real-estate for Fiat within the same dealership. In my experience, Fiat SAs get influenced by the treatment meted out to taxy chaps by the Tata SAs and think it alright to treat every customer same way. When a demanding customer confronts them, they are at loss. A clear demarcation of boundaries in service areas should remedy this.
2. Fully agree with reducing number of variants under the same roof. Most importantly, whatever is being sold, ought to be available on display. Number of times, particular variants are not available on display.
3. Brand build up is a must. Somehow, tying up with Tata has stamped the image of mass vehicle manufacturer with chalta-hai attitude. No doubt Fiat is the mass vehicle manufacturer in parent country, but they have a great brand reputation there which needs to be emulated.
4. There have been two major negatives for current line up - under-powered and poor plastics. The signs of a revived A.S.S are clearly visible by the effort being put in. However, these two areas need clear improvements. I may be wrong, but I think, Fiat is sourcing the plastics from same manufacturers as Tata. Either these suppliers need to be changed or Fiat needs to put in a tighter control.
Competition is tough, yet I believe Fiat has the willingness to turn things around. Only thing, they need to be fast and accurate in whatever they are going to do.
|10th September 2010, 22:55||#15|
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I have one important point here, whether it is possible through the JV or not.
Fiat need to have the best of the engines to themselves. They should not share all the engines with Tata. Obviously, the average Indian customer see the same engine in a cheaper package and will buy the Tata for obvious reasons.
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