The two were partners for decades till they decided to go their own ways. Today, Premier and Fiat are back again, but in a different space. The Italian automaker will supply its 1.3 diesel multi-jet engine to its former ally for use in the Rio compact SUV.
“We have had a long and historic association with Fiat. I am personally thrilled with this deal which offers us a state-of-the-art Euro 4 engine,” Mr Maitreya Doshi, Chairman and Managing Director of Premier, told Business Line .
Fiat has a joint manufacturing alliance with Tata Motors while Premier has tied up with Zotye of China to make the Rio at its Pune plant.
“This engine is a vital element to our Rio strategy as we have so far been focusing on Euro 3 (and, hence, tier-II & III) markets. We now have the opportunity to access major metros which are big markets for the Rio,” Mr Doshi said. These Tier-1 cities are critical as they account for 50 per cent of business in the automobile market.
The Fiat engine is used in Maruti and Tata models too and it is this commonality (across products and companies) which translates into comfortable synergies in repairs, service and accessibility. “The engine represents a huge boost to the Rio and also offers value to the customer in terms of easy access to service and spares,” Mr Doshi said.
There are also many independent service outlets which handle cars fitted with this engine and are capable of servicing the Rio. Premier is working on identifying them and will eventually give them its authorised service outlet badge, PASS (Premier Authorised Service Stations).
According to Mr Doshi, the Rio is meant for those customers who want to be different. “It is a lifestyle product and not a classic utility SUV. The Rio can make a strong statement in urban areas with its exclusive identity,” he said.
The fact that diesel has emerged the fuel of choice in the automobile market is an added bonus for the Rio whose targeted customers include young families and women. Premier has targeted production of nearly 10,000 Rios this fiscal, going up to 25,000 units eventually of which the Fiat engine will take up a considerable portion.
The company is also working on “second and third products” from the Zotye stable which will hit Indian roads in due course of time. “We have no intention of being a one-product company and the credo will be to deliver rugged, utilitarian vehicles that also create a little excitement,” Mr Doshi said.
Zotye has a variety of products and Premier is bullish on their prospects here. “We have an excellent relationship with them and this is the way forward for us is to keep costs down and develop potential niches for the market,” he added.
For the moment, however, the top priority is to develop the front-end and “nurture it carefully” to meet customers' needs. There are 60 dealers now and the plan is to enhance this number to 100 by the year-end. “The core to our future lies in a good distribution network. There is lot of goodwill for Premier as a brand and we could build on this base with interesting products like the Rio,” Mr Doshi said.