The Italian major aims at success in India yet again but with new strength from Chrysler. Here’s looking at the Fiat-Chrysler Group’s car and SUV gameplan.
Enrico Atanasio, Fiat India’s chief, who is in his mid-50s, recently undertook a whirlwind tour of Trivandrum, Bangalore, Chandigarh, Delhi, Mumbai, Ludhiana, Ambala, Patiala and Pune to get a first-hand understanding of the Indian market. This will also ensure that not everything is Greek for this executive who was the MD of Fiat Greece in his previous role.
Atanasio, who is set to be the managing director of the restructured Fiat India subsidiary, wants to get a real-world feel of the market and relay feedback to headquarters. Atanasio says, “Before my arrival, the Group was relying on some contacts, maybe sporadic, which does not give justice to the complexity of the country.” Whether that affected India’s performance here is debatable. “I have the responsibility to translate for my colleagues what the peculiarities and commonalities are in India,” he adds.
Atanasio also has more opportunities to grow Fiat India’s business compared to the earlier expats who come to steer Fiat India. For starters, Fiat has Chrysler’s portfolio and its engineering resources to fight the battle. Fiat’s situation in India is a bit peculiar. Wherever Fiat has a plant, it enjoys a market share of over five percent. That has not been the case here despite being in India for 15 years. But things may change with Chrysler, and its brands, being available for the Group to enhance its marketshare. “There are brands that are supposed to play a worldwide role – Alfa Romeo, Abarth, Fiat, Chrysler and Jeep. Those brands will be considered as options (for India),” says Atanasio.
The Fiat team is now on overdrive to put the infrastructure in place to enhance Fiat’s marketshare, which is now 0.5 percent. The parent company’s target is six percent of the global market. “To achieve that, the Group will have to grow at 4-5 percent annually,” says Atanasio. “At present, we have more than 10 percent in North America, close to 10 percent in Europe, and more than 20 percent in Brazil,” he adds.
Brand perception
Fiat may not be performing to its full potential in India but it still has a fair amount of brand pull, the company believes. “When we announced the end of the joint retail arrangement (on May 2), we opened a link into a site for prospective dealers to apply. Within a month, we received 740 applications,” reveals Atanasio. Fiat currently has one independent dealership each in Delhi, Hyderabad and Pune. The plan is to set up “close to 80” dealers by March 2013.
Fiat has indicated that it will look at models from its current portfolio, rather than develop a specific model for India. The Uno and the five- and seven-seater versions of the 500L are likely candidates. Fiat is trying to re-establish itself as a premium brand offering Italian virtues of advanced design and technology.
Fiat has begun working on launching a Jeep SUV, most likely the Grand Cherokee, in India. “For a market where the SUV segment is developing, there is one strong candidate – Jeep – which has enormous brand equity,” says Atanasio.
The SUV segment promises to be a competitive one. The Renault Duster received 10,000 bookings within a fortnight of its launch. M&M’s XUV500 had received 25,000 bookings in its first booking period. A new range of small SUVs ranging from the Premier Rio BS IV diesel (with Fiat’s 1.3 Multijetengine) to the Ford EcoSport are set to hit the market starting August.
Cars apart, Fiat’s 1.3-litre Multijet engine is in high demand. Around one-third of the diesel passenger cars on Indian roads run on Fiat engine technology, says a senior company official. He also adds that the 1.6, 1.9, and 2.0-litre Multijet versions are being considered for India.
The 1,200 engineers at Chrysler India Automotive, Chrysler’s global R&D arm, and Fiat’s small R&D centre at Ranjangaon, near Pune, with 35 engineers will be key in fuelling the Fiat Group’s offensive in India.
INTERVIEW WITH ENRICO ATANASIO, HEAD — COMMERCIAL, FIAT INDIA
How are you going to leverage Chrysler to Fiat’s advantage in India?
Chrysler’s engineering and development centre in Chennai is serving all the Fiat and Chrysler Group’s regional offices in the world. That group is working very hard to ensure the future of the business, because you don’t write the future of the car business in the same year. You write it 10 years in advance. So that is one of the leverages that we will be using, as we are now the seventh biggest group in the world. It will support the development of Fiat in the region.
We also have an R&D centre at Ranjangaon, which used to support Fiat before Chrysler became part of the group. Overall, the expertise in Chennai is spread across all sectors because they work on the entire R&D spectrum.
Would Fiat develop a product for markets like India and China?
To develop a product, one needs reasonable volumes. For now, we are very strong in the small segment. You may know that we have 4-5 products in this segment and can find a suitable one for India. So, for the moment, I don’t see a dedicated product. India is becoming less and less a closed market. Therefore, it is time now to bring to India all recent technologies.
Will you relaunch the Uno brand as it enjoyed good brand equity in India?
We are considering all the options. The Uno has done well in India and I’m not surprised that the company plans to launch it again in some countries.
Do you think that first-hand understanding of the market was the missing link for Fiat in India earlier?
Fiat’s decision to send somebody from Europe, to live here, understand and translate for the Group, I think, is a courageous and brave decision. Before my arrival, the Group was relying on some contacts, maybe sporadic, which did not do justice to India. India is not one country. It is a combination of cultures that you need to properly understand if you want to address it seriously. So, this effort is there.
Customer clinics were held for the Grand Cherokee in India, when Chrysler was with Daimler. But it didn’t result in a launch. Is the model a good candidate for India now?
I think those times were not exactly the right times but I believe the time is interesting now. It would be the perfect candidate, in terms of the value of investment, value of the brand, value of the product. There is no reason why the product can’t come to India. There are some products that you can consider absolutely iconic in the market. At the moment, Jeep products are in short supply because we have such a strong demand worldwide. I have to be very persuasive to bring Jeep here.
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