Fiat’s Indian unit is now looking at life beyond its joint venture with Tata Motors. In a desperate bid to boost sagging sales, it is opening independent outlets to sell its cars here.
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“We are planning to open 22 outlets in 20 cities by the end of 2012,” said company president Rajeev Kapoor as he launched upgraded versions of the Punto and Linea in New Delhi.
The company is also considering ‘localising’ a new car cheaper than the Punto for India from its global model line. “To operate in the volume segment, we need a car which is below the Punto [in pricing]. Currently we are working on a plan to launch such a car in India. It will be an Italian car with India-specific features,” Kapoor said without providing further details or a timeframe.
Fiat India, which had entered into a joint venture agreement with Tata Motors in 2007, sells cars through some Tata dealers.
The companies also jointly manufacture vehicles at a factory in Ranjangaon near Pune. Tata makes the Manza there and Fiat produces all its local models.
Suggesting the split was amicable, Tata Motors’ passenger vehicle chief R Ramakrishnan said: “Fiat is not happy with numbers and with new outlets known as Fiat Caffe [will] rejig its whole strategy and [boost sales].”
Embattled Fiat sold only about 16,000 units in India during 2011. Caffe outlets in Delhi & Pune are already open.
Dealers – 170 currently – will now open separate showrooms for Tata and Fiat cars.
“We are altering our marketing strategy. We have identified 20 cities where Fiat cars will now be sold separately and independently,” Kapoor added.
The move means dealers would have to make additional investments in separate showrooms and after-sales service locations.
The change was dictated largely by the fact that dealers with joint showrooms were selling more of Tata’s cars than Fiat’s.
