Fiat Chrysler plans dozen launches to expand in India; also plans to double … – Economic Times

Posted: Monday, May 12, 2014
MUMBAI: Fiat is taking another run at getting things right in India as part of the wider strategy that the company, now Fiat Chrysler, has for the Asia-Pacific region in its 2018 plan.

The first foreign carmaker to enter India, the company languishes at the bottom of the table in a highly competitive Indian passenger vehicle market that’s struggling to cope with a slowdown. Fiat plans to launch 12 models based on three platforms by 2018, more than double its workforce to 5,000 and increase capacity 80% at its Ranjangaon plant, a manufacturing joint venture with Tata Motors, to 2.45 lakh units by 2018.

Fiat is eyeing volumes of 1.3 lakh units by 2018 from 10,000 in 2013, a compounded annual growth rate of 50% over the next four years, according to a presentation made by Mike Manley, COO of the Asia-Pacific region and a member of the group executive council at Fiat SpA, to investors last week.

Manley expects the Asia-Pacific region to grow more than five times in the next four years to 1.1 million units led by China and India which together are slated to contribute over 10% of the regions sales

The much-awaited entry of Chrysler brand Jeep into India is likely to take place by mid-2015 against the earlier plan of end-2013. The company intends to assemble kits of the luxury SUV Grand Cherokee in India, whereas it will produce the C segment Jeep locally, likely by 2016. The company may set up a small assembly facility in Ranjangaon for Jeep and will have a standalone network for it, managed by a separate team.

Fiat has been keeping a low profile in the past year as it unwound its joint sales and marketing venture with Tata Motors and consolidated its presence by migrating to its own network. It has also streamlined operations and hired staff from rivals such as Hyundai to build up its team.

Fiat Chrysler plans dozen launches to expand in India; also plans to double workforce to 5,000

The new plan is different from the comeback strategy announced by Fiat in April 2013 following its breakup with Tata Motors. The B segment compact SUV doesn’t seem to be part of the new plan as it had been earlier, which has caused some surprise given the success of the Ford EcoSport and the Renault Duster, apart from which Fiat itself thinks utility vehicles (UVs) will be the fastest growing segment in the coming four years at 15% CAGR.

The company will instead focus on its yet-to-be launched crossover Avventura and models based on a new small car platform, which will hit the market in 2016-17.

Fiat seems to have largely been able to move away from negative perceptions of the brand, said Deepesh Rathore, director at EMMAAA, an automotive consultancy firm.

“Fiat as a brand is in a no-man’s zone. They have very little image or perception and that is a positive thing. It seems that they have successfully wiped out the negativity from the Tata association and things can only get better from here,” he said. “At the same time, I still find 1.3 lakh units an optimistic target. I was expecting Fiat to consolidate till 2016-17 and then bring cars in the A segment, below Grande Punto, that would have added significant volumes,” said Rathore.

Fiat intends to have only two new products–the Punto and the Avventura–in the volume end of the market.


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