Fiat Undergoing a Tough Transition Amidst India's Auto Slowdown

Image: Amit Verma

Q: Last year was tough?
Nagesh: Last year was our year of transition post our arrangement with Tata Motors. On April 1, the new company was born and we formed a three-pillar strategy: Network expansion, product strategy and brand building. So, where did we end up? We said [we’d have] 100 exclusive dealerships by 2013 and we did 100 by December. We have another 20 points-of-sale from people who have signed up and are in the phase of construction. We will go to 150 soon and then see how it goes. But, why did we do this exclusive sales outlet? We wanted to be closer to the customer and give them international standard sales and service. We learnt lessons from the past. One of the [things] was to make spares available and affordable. We did both. How did we do that? We told every dealer coming in that the top 100 used spare parts have to be in stock. So, light bulbs, wipers, brake pads, whatever the case may be, have to be in stock.

The other thing we have done is starting a Fiat Amigo programme. ‘Amigo’ means friend in Italian. And if you buy a Fiat car, within 15 days a senior dealer representative will come to your place to explain the car; it is almost like a relationship manger. That has brought us closer to the customer. And we have done a lot of brand building. As a result we have seen quite a few ex-Fiat customers come back. Also, now we are five products. Fiat is no longer a two-product company. Now you’ve got the Linea Classic, the Punto, the new Linea, new Punto, Aventura and the Abarth 500. This will only help us bring in more customers in the Fiat fold.

Q: What is the capacity utilisation?
Nagesh: Just like everybody else, we are running below capacity.

Q: What happened to the Jeep Chrysler plans?
Nagesh: We had said that we will bring the Jeep to India and I made the announcement last month. Clearly we are committed to bringing Jeep to India. We have done a lot of market research and believe there is a lot of resonance. But then we looked at the economy in the last two quarters... and the auto industry and foreign exchange fluctuations. When you are introducing an iconic brand like Jeep, you want to ensure that you are looking at the long-term picture and introduce it when the timing is right. So, it has been deferred. We are just waiting and watching the environment but it will come. It is just a matter of time.

Q: Any time frame?
Nagesh: Well, we can’t predict the future but our goal is to bring it as soon as possible. As soon as the [economic] conditions improve, we will.

Q: Has Fiat been able to fix the perception problem it had with customers resulting from a loss of confidence?
Nagesh: The answer is as we all know, perception lacks reality. We are making improvements month-on-month and I believe the answer is yes. When we are doing customer camps, we have a data of 100,000 customers and the car park is about 200,000 cars. So we are calling all those customers back. And then when they are experiencing it, they can see the difference. As we all know perception takes a little longer to change. Month-on-month we are making a significant difference.