Fiat’s acquisition of Chrysler will pave the way for a faster rebuilding of its India business, which has been floundering for over 15 years now.
The company announced on Monday that it was set to take complete charge of the iconic American brand, which has been in its fold since 2009, when Detroit (with the exception of Ford) went bankrupt and needed a lifeline.
While Fiat bailed out Chrysler, the US Government stepped in for General Motors.
The Italian automaker had already announced its intention to bring Chrysler’s Wrangler and Grand Cherokee SUVs to India as part of its revival plan.
The Jeep brand is expected to strike a strong emotional connect with young buyers here, who are increasingly gravitating towards SUVs.
A clearer picture will emerge over the next couple of months, when Fiat unveils its global plan for the next five years.
India is expected to be a critical part of this forecast, which will also include markets such as Russia, Brazil and China.
As in the case of Jaguar Land Rover, which has been the best piece of news for its owner, Tata Motors, Chrysler has become an important part of Fiat’s business.
Its Dodge and Jeep brands have been clocking good numbers across the world, in sharp contrast to Fiat’s own range.
With Europe still skating on thin ice, growth in Latin America, Russia and the Asia-Pacific will become imperative for Fiat during the course of this decade.
And it is here that the Chrysler basket of SUVs will be the best bet.
India strategy It is nearly two years since Fiat called off its joint marketing alliance with Tata Motors in India and decided to plot its own retail strategy.
The exercise started in right earnest but has coincided with the worst slowdown in the auto industry in recent times. This year Chrysler’s two SUVs are expected to be launched in India.
From Fiat’s point of view, the India strategy has changed dramatically since the time most decisions were made in Italy’s Turin headquarters.
Today, the country is part of the Asia-Pacific roadmap, which includes Australia, South Korea, Japan and China.
Of Fiat’s five R&D centres in the region, the biggest is in Chennai (Chrysler India Automotive), which pretty much puts India’s role in perspective.
The engineers here form a critical intellectual pool that works on a host of projects across the Americas, Europe, Asia and Africa.
Yet, while work at the back-end is important, Fiat would much rather have a larger presence in the front-end and build market-share.
It has had its share of potentially successful products, such as the Uno and Palio, but has just not been able to capitalise on the initial momentum.
As it banks on Chrysler as well as a revival in the economy, Fiat would be only too aware that this is perhaps its last big opportunity in India. It cannot afford to slip up again, especially in an intensely competitive market with far more discerning customers.