FCA India is bullish on the Jeep Compass's prospects in India. President and MD Kevin Flynn speaks on developing a top-quality SUV, the high level of confidence in Indian suppliers, and the likelihood of a petrol model.
FCA India, which needs a winning product, has revealed the Jeep Compass which is to be produced at the Ranjangaon plant both for the domestic and export markets. President and managing director Kevin Flynn spoke to Shapur Kotwal and Amit Panday on developing a top-quality product, the high level of confidence in Indian suppliers and the likelihood of more models spawning out of the Compass platform under FCA as well as Fiat.
How has the reception to the Grand Cherokee and Wrangler in India been thus far?
We made the announcement and launched the SUVs in August-September last year. Between then and the end of the year, we were engaged in opening the ‘Destination Stores’, which are our dealerships. Since then we have been delivering the vehicles.
Bringing the Grand Cherokee and Wrangler (to India) was a job, and to some extent we have achieved that task. It was to bring the globally acclaimed vehicles all the way through the CBU (completely knocked down) route and make them available in India. As an announcement of what Jeep is and what it is about, it (launch of Grand Cherokee and Wrangler) was a definite precursor and preparatory process for launching a locally manufactured product. And here we are (with the Jeep Compass).
So the story is unfolding. The story was never solely about the CBUs, our first chapter was not the CBUs. Instead, it is using the CBUs to establish the credibility of these global products as we then bring a locally manufactured global product.
That’s the beauty of this particular project (Jeep Compass). We haven’t developed a car for the Indian market that we then are looking to sell elsewhere in the globe. What we’ve got is a global car with global standards and international design language. It’s a car for global purpose that is going to be manufactured in four locations. We (FCA India) are one of them.
Because of what our plant capabilities are (Ranjangaon unit), our history in terms of manufacturing and the supplier base that we have built and established here, we have now got the responsibility for the (global) right-hand-drive (RHD) markets from here. This is a very different story than to just getting a better foothold in the Indian market.
This is a story around Jeep’s global aspirations for growth and what role India can play – both as an export hub and bringing a product of competence in the Indian market – and allow us to get a far stronger foothold here that we have had for some time.
SUVs, at 30% YoY growth in FY2017, are the fastest-growing segment in the Indian passenger vehicle market. While the Jeep Compass will be positioned in the C segment, what are the possible sweet spots within the current SUV market in India?
I think we have found one to start with. Over the next five years, you are going to see a (big) change in the dynamics of the SUV segment in India. If you just look at what is happening in the other global markets, particularly when you compare them with India, the terrain here and also the lifestyle, SUVs are such a natural choice. If you are looking to purchase a vehicle with the appeal of an SUV over, say, a sedan, it’s just going to move into an SUV market. Factors such as the flexibility, sense of adventure, right driving positions, and the competence of dealing with different terrains are all making way for the SUV market.
The difference here though is the fact that in a lot of cases, a number of car companies have got cars that look like SUVs because of their driving positions and their stance. That doesn’t mean that they have the capability of what makes a real SUV. The difference here is that this is a Jeep. If we have a Jeep, it has to have capabilities. That’s in the DNA of what we are. There are origins and elements in the DNA of this car that can go back (in history). What made a Willys a Willys is still important for us. So we have a vehicle of a modern-day era that actually has high levels of capabilities and competence.
Will the Compass come in two-wheel drive too?
Yes, we have the two-wheel drive and the four-wheel drive. The four-wheel drive is super-capable. What’s important, when we launch, is having the right price positions and getting ourselves established and really desirable.
This seems to be the absolutely perfect strategy. Will you be super competitive on price?
I think we have found a really good spot to be in with a car that has a level of competence, which will be unmatched. We will announce our pricing at the appropriate time. From the competence and build quality point of view, you can compare the Jeep Compass with the best of the top competition. But we know where we need to be from the price position to make sure that we have the kind of success in the Indian market that this car deserves.
A number of Indian suppliers are a part of the Jeep Compass project globally. How do you assess them in terms of global scale and quality standards?
There are areas where the technologies were available in India; wherever they weren’t, we brought them to India. The competence level of our suppliers is very good. I think this is the first premium car that is going to be exported out of India. We are, let’s say, path-breaking in that sense. I am very confident that what our suppliers have achieved so far and about the products that they will deliver to us in the future. I don’t think that there is any difference between the cars and parts that are produced in other parts of the world as compared to the ones that will be produced here.
So if we’ve got a car in the UK, it’s going to feel and look and perform exactly like a car in France, which will be coming out of another facility.
Will the UK-bound Jeep Compass be made in India?
Yes. Can you believe we will export cars from here to UK, Japan, Australia and in other markets. When you will see the car, you will be amazed at the surface quality and the depth and the integrity of that car, it’s phenomenal.
How much has FCA invested in the global development of the Jeep Compass, given that it’s going to be offered in 17 different powertrain options across continents?
We won’t be able to give you the development costs of this product on the global scale. What we can tell you is that we have invested US$ 280 million in our (production) capabilities at Ranjangaon (near Pune) and our suppliers to actually bring this vehicle to fruition. That’s our local investment. Obviously, on the global scale, it would be much more.
Will the Compass be the first of many more models?
What the Compass does is it allows us to bring a platform to the plant – and this brings a lot of opportunities for us. It also brings us the way the plant has been developed, and that now gives a lot of flexibility. It equips us not only for this chapter but also for the next chapter of the story. This is an important step for us as an organisation. This project clearly gives us the scope to do a lot more than we’ve ever been able to do in the past. This level of investment doesn’t go for a one-horse wonder. This is, undoubtedly, the start of a different chapter and a different beginning for us.
Will there be platform sharing with your sister brand Fiat?
I think that opportunity exists for the very nature of that platform coming into the plant. How we exploit that and how we find the opportunities for that is something we continue to work on. We have our own quest to find the right solution for the Fiat portfolio. If we look at the Fiat portfolio, we understand that it is at a certain point in its lifecycle, which we understand is a very mature point in its lifecycle.
But for the moment, we are only focusing on the Jeep Compass, which is a product at the beginning of its lifecycle. It is up to us as to how do we manage those portfolios. Undoubtedly, the investment in the plant gives us a far broader opportunity for product development.
Do you believe that there is a big market for a petrol variant for an SUV (Compass) and its price?
I believe that petrol will clearly become more prominent fuel of choice moving along as there are changes in terms of the control of diesel fuel price. What we wanted to do when we went live with this car is that we wanted to cover both the fuels (petrol and diesel). We have done that. I think there is still big demand for diesel in this type of vehicle, which is fantastic. We have certain expectations (petrol vs diesel variants of Compass) but we have also made sure that we got the flexibility to meet the demand of either variant.
We showed this car to our dealers and in each case we asked them for the price expectations. By their feedback and understanding where I know where we want to be, I think we have got it right.
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