In early 2010, Fiat Auto had made an investor presentation at its Turin headquarters where sales in India were projected at 130,000 cars by 2014.
The company had indicated that this would translate into a five per cent market share. The biggest growth driver would be a B plus compact car, a segment which now includes the Swift, Figo, Polo and Etios.
The presentation clearly showed that Fiat was more bullish on Russia and China which would also see Chrysler products launched over the next few years. India, in contrast, was a lot more subdued both on the product range (only Fiat) and targeted numbers.
A lot of events have occurred since and Fiat, along with Chrysler, will unravel its roadmap in Mumbai later this week. It is clear that the Italian automaker is finally serious about India which it has been associated with for over five decades. When the country first threw open its gates to foreign carmakers in the early 1990s, Fiat kicked off its innings in earnest, but has just not been able to make any headway since then.
When it recently decided to call it quits with partner, Tata Motors for the joint retail business model (the two continue their manufacturing alliance near Pune), it was a clear message of its intent.
Fiat had also figured out that it was imperative to focus on India as part of the overall strategy for Asia-Pacific. In addition, the recent crisis in Europe only meant that emerging economies were the growth drivers of tomorrow.
Brand recall
Unlike other carmakers, Fiat had the advantage of tremendous brand recall in India when it first decided to set up shop in the mid-1990s. Its association with Premier Auto goes back to the 1950s which helped build a tremendous customer connect over the years.
Yet, it just could not capitalise on this advantage thanks to a series of setbacks but is confident that it still enjoys goodwill in the Indian market.
With Chrysler now part of its global kitty, Fiat will leverage its presence in India’s SUV space which is seeing buoyant growth lately.
Its own strengths in compact cars will see a greater focus in this product segment as well as the entry-level sedan segment represented by the Swift Dzire and Verito.
Challenge
The biggest challenge for Fiat will, of course, lie in ramping up dealerships and assuring its retail fraternity that it means business this time.
It will be interesting to see if the branding exercise includes Chrysler which had first planned to set up shop in India with the Mahindras before trying out something with Bajaj in the mid-1990s.
After the merger with Daimler, speculation was rife that Chrysler would also be part of the product line-up here. Finally, it now looks as if the iconic American brand will finally keep its date with India, albeit with an Italian ally.
murali.gopalan@thehindu.co.in