Discussion in 'Fiat India News' started by amogh, Feb 5, 2015.
there is no point in discussing about sales....enough has been already discussed.
I don't know if Fiat is serious about numbers. They launched Punto Abarth, which everyone appreciated, but at the same time everyone including Fiat knew that this wont give any considerable numbers. It may add maximum 50-100 units per month. If they launch Punto with Linea TJet engine, it should atleast give couple of hundred units and also some real reason for dealers to sell.
I had pre-booked Abarth Punto, but after looking at the price and ground clearance, I was not able to justify this as my regular commute hatchback, so went with Punto 90HP.
The site Management Punditz has access to Avventura sales. Apparently the Avventura sold 900+ cars in 2014, having been launched only in October last year. And has been sold at the rate of 160+ a month this year, with a ytd total figure of around 1750 so far jan-nov.
The real issue, then is: the disaster caused by excessive inventory of the old Punto and Linea when both the new Evo and then the Avventura were launched. That crimped their sales, drastically reduced the 'new car seen on the road' effect, apart from necessitating that painful mega-discount or rather clearance sale in dec 2014.
So, as @nibedk said, it could easily be that the numbers are actually better, speaking financially, for dealers (which is the ONLY consideration left through the all-new launches from Jeep and Fiat in 2016 and 2017) this year and these last 2-4 months of 2015?
PS: an interesting measure of brand-pull or in FIAT's case brand-rejection in the wider marketplace. The Avventura entered a market segment that had just 1 member: the ecosport. No competition from any Japanese or Korean firm. Yet a model from Hyundai that is a total copycat reaction to it, the Hyundai i20 Active, that came after it, has, from the outset, sold at the rate of 9X as much. i.e., even with Fiat offering a class-best and more-inexpensive model with only 3 competitors (ecosport, Avventura, i20 active) it goes nowhere much with sales. That is the measure of the closed-mindedness towards this brand among at least 90+% of the mass-market consumers.
FIAT have to really decide whether to leave the mass market in order, say, to specialize on the Abarhs, and the 10-16 lakhs segment alone+exports, with Jeeps starting from say 18/20 lakhs upwards, rather than pursue this Palio-Punto-Avventura-type segment positioning with a largish dealer-body to support? They must move first with at least 2 10-16lakhs models in 2017, not with a punto replacement or an inexpensive sedan like the Grand Sienna: the Aegea sedan, perhaps, with its hatch in cuv form as a c-suv? And/or the 500X or 500L?+exportability. IMO. And selectively reduce the dealer body, by focussing perhaps only on the bigger city-markets and on regions that are relatively more 'hospitable' to Fiats (eg, South india +Maharashtra, generally)?
Not South India. Punjab, Haryana, Maharashtra, Kerala, Tamil Nadu, that's it. Telangana and AP are Creta lovers.
@prabhjot You my friend live in a dream world I feel sometimes. By saying that the market is close minded you are ignoring the actual problems that Fiat has. That the gearbox is notchy is true and so is the fact that the interiors are spartan by competitor standards. Do you think Fiat will succeed in giving good interiors in the 15 to 25 L category when they cannot do the same in the 6 to 10 L category You always miss the point that an individual buyer is allowed to decide whether he wants a good ride or a large touchscreen TV in his car. His money and more power to him. Now any car manufacturing company if they want to crack the market will have to give the , market what they want. In this case the market wants a standout looker, immense bling, easy to drive (automatics help and they are constantly on an upward growth trajectory) and fast changes (the market gets bored quickly, an exactly identical looking car for 6 years is a strict no-no in India). Now if you say Fiat is unwilling to do that due to brand purity, heritage and all they may as well shut shop and leave the country (the car business).
I agree @Raj_pol.......the interiors are outdated and so are the features. My sister bought a second hand Fiat Punto Evo 3 door Active 2010 model, that means we are getting dated models in India. the active version there is full of features even Start Stop button, music system etc....
You really think people would buy Fiats if they had what you suggest they do? The market looks at any number of things, long before it considers the sort of factors you're enumerating: brand-trust, brand prestige, ass trust, resale value, and what their uncle, aunties and friends+spouses insist is the obvious choice(s).
Most buyers ARE closed-minded if not actively hostile or distrusting of FIATs. That cannot and will not change by just the launch of evermore new models and bling-shling etc at cut prices. Most buyers do NOT even respond well to price/discount signals when it comes to Fiats, which are notably cheaper to buy version-for-version at list price let alone with discounts, and to own (spares, warranties).
Most buyers do NOT not-buy FIATs because of the gearbox or the hydraulic steering or the looks (which remain great after the excellent facelift of the Grande Punto) or the equipment list (which is every bit as long as any competitor, give or take a few) or indeed the interior quality (and what is wrong with the 'quality' for the price of the new Linea/Avventura/Evo's interior quality? Better or best somewhere, a bit ORDINARY in some, same as all other cars.)
People just WILL NOT buy Fiats, even if they feel free enough to consider it in the first place.
This requires either (a) as you say, shutting down the FIAT brand and keep profits rolling in via Maruti and the Tata jv, and JEEP+exports
OR (b) giving the market premium models with a clear, emphatic brand identity and USP, and emphatic visible, tangible quality of 'jo dihtaa hai voh bikta hai' variety i.e., models that they will therefore have no option but to price high, namely in the 10-16 lakhs type models (500L? Aegea sedan and croos-hatch? 500X? Renagade?.....), at least 2 more models like the Abarth Punto and Avventura, since they also have safety, build, and chassis+suspension etc engineering standards to maintain and ONLY then
move back downwards below 10 lakhs to replace the Punto and Avventura.
An all-new Punto-replacement model launched tomorrow will NOT sell-well either, NO matter how much they advertize and no matter what its gizmo and bling quotient.
A damaged brand that the herds have near-blacklisted has no choice but to start at the higher end and then proceed down to the really cut-throat, risk-averse part of the market where the Punto sits.
It MAY yet be that the prudent thing to do, given the blacklisting of the FIAT brand (however well-deserved in the past) indeed is to shut the brand down.
The complete and negative response to the new facelifts, the new independent dealerships, the multiple ad campaigns and website and youtube+facebook likes, the Avventura and the miniscule demand for the Abarth-s etc, not that they could not have been better executed, all
point in the direction of a revival of the brand being near-impossible. We are an unforgiving market and public, on average, apart from being incorrigible, so.
However, IF they still want to persist with the FIAT brand (and I wouldn't blame them for turning deeply pessimistic at this point) they MUST follow the Abarth-like approach: great, outright USP and authenticity soaked, emphatic-class-best, very distinctive c2+ expensive models (at least 2) FIRST followed within a year by the bread-and-butter mass market econobox with bling and touchscreen that you seem to think is the issue. From top, to down. The other direction will be fruitless and a predictably costly-failure.
And do NOT launch ANY model whose india-targetting investment and marketing costs you cannot amortize through exports. Betting totally on this mass-market is a fool's errand, which is what every car firm is being proven to be, loss-making as they all are in India, barring MS, HY, Mahindra and.....FCA.
That is just the way it is, why and how come and whose-fault-it-is and hand-wringing is beside the point by now.
--- Double Post Merged, Dec 5, 2015, Original Post Date: Dec 4, 2015 ---
Consider the approach FCA has these days, as elucidated on the recent occassion of the launch in Australia of the Fiat 500X:
And I agree wholeheartedly. FIAT-in-india can ONLY do better here with very emphatic, distinctive USP-models, of course while pandering totally to the bling (neither the evo nor the linea are short of bling)+bright-blue dashboard button and screen backlighting (cool yet warm amber back and ambient lighting is so dull)+touchscrren+soft-plastic (the Evo+Linea+Avventura dashboard soft-touch-textured-fabric is softer than even the Polo's, definitely softer and shinier than the i20's, already) etc.
The latter are mere necessities NOT sufficiencies in whichever new models come. The sufficiencies of much-increased sales and brand-trust+prestige can only possibly follow if as Olivier Francois said, FIAT stands out for something relatively Unique and clear and authentic and then offers a compelling product that matches that promise.
NOT be me-too commoditised, all-too easily substituble with a better-trusted-brand's equally commoditised model. If the all-new 2017 Punto were to be like a Hyundai i20 or a 900kilo lightweight Maruti baleno, hell even I/we would rather-buy the Hyundai or the Suzuki, no?
i.e., the stategy that Ford, nissan and renault are following (cut-price commoditised cars with zero brand-distinction) is doomed. They will forever be losing money in India, and their brands will never reach the trust or the allure/trust/prestige of say a Hyundai or a Maruti or Honda in India.
IF FCA see it fit to keep-trying with the FIAT brand (and it is not obvious that is a good-odds bet they can afford to take) they must strictly adhere to the business, brand-identity-centric philosophy Marchionne and Olivier Francois follow (see the quote, above).
They are privileged enough to able to afford-to in india, since their main profit and revenue stream is engines and gearbox supply, the tata jv, and exports of components and in the future whole-cars, NOT retail sales.
Let's see what they do. I am not at all hopeful IF their strategy is to continue to scrum in the Punto-Avventura segments with the all-new models. If that is all there is to the strategy (from 7-10 lakhs), they are doomed in any case, irrespective of how much advertizing they do and of how-good a value-proposition they provide. Maruti, Hyundai and one or 2 others will eat their tiffin, again.
--- Double Post Merged, Dec 5, 2015, Original Post Date: Dec 4, 2015 ---
@prabhjot This is what I end up arguing on and you do not seem to understand.
1. The assumption that cars will not sell without actually making the necessary changes.
2. Also the misconception that you have on the feature list - compared to an Elite i20 neither the interiors nor the feature list are anywhere close.
As I keep saying you should talk to people in general and look at the problem from a business perspective to see the reason that Fiat has been failing. If they continue on the same path they would fail with the Jeep's too.
I for one told you long before the Abarth 595 was released that they would be lucky to sell 50 in a year. I mean in what world did you assume that a tiny little car with mediocre characteristics (400 BHP cars with far more features are available for far less) would sell for 38 L on road in Bangalore?
Heck I would buy a Skoda Octavia RS and have a lot of change left.
It is also ridiculous when you leave known sources of pain in so called premium offerings like the Abarth Punto. People who buy the vehicle understand drive qualities and they would have appreciated an updated gearbox. I also stand by my statement that designs need to change every 6 years at least in the modern world.
Even if what you say is true, not all of which is btw (the i20 elite's feature list is in no way longer let alone better than the Punto evo's, version for version, for eg, there is no Skoda Octavia vrs offered in india) what you have to recognize is that the product spec part of FIAT's problem is only one small part of the issue.
There are such colossal demand-side issues, from the consumer-cultural to things like vicious cycles of low-sales=low resales=low sales=unviable dealers=low sales ad nauseum.
The all-new models will, i am sure, include these mere 'necessities' of more-flashy-vulgar styling esp inside, touchscreen and automatics etc, some more soft touch dash plastics, more bottle-holders, etc. By themselves this will add not one additional sale to FIAT, since they are the dominant cultural norm in our market (conversely, strong build, rigid chassis, long travel yet firm and flat suspension engineering etc gets little to no credit) because those who evaluate car choices in these generic un-brand-identity etc terms will invariably gravitate towards the 'safer' choice. That is the text book definition of 'commoditisation': there is acute substitutability, which will never help the smaller, less popular brand, it will necessarily favour the already-dominant ones.
They therefore have no choice but to play up brand-authentic new models, not substitutable commodity cars (at a superficial level in our market, every car is potentially great looking, young, luxurious, gadget laden, good-value, etc etc).
That is why, while they will address the gearbox 'issue' (which is barely one) and the need for more soft plastics or touchscreens they will manage to attract buyers only by being better and singular in other, more brand-specific USP ways. The stuff you mention is just the default position that necessarily favours Maruti, Hyundai and maybe a little Honda. It cannot aid a brand like FIAT.
Am hopeful they will have seen the wisdom of this and will follow the Abarth approach they've shown since kevin Flynn came: cars with Italian chic-yet-panache filled design AND.....etc
i.e., the whole "Crafted For Car Lovers" theme. "FIAT/Abarths are the REAL thing, not a south korean or japanese pirate edition" theme. "Fiats are both inexpensive and yet are for the knowing and informed and those who truly appreciate automotive engineering and design" theme.
i.e., models like the Aegea sedan+Aegea hatch-as-a-crossover, models like the 500L if not the 500X, like the Renegade (cheaper edition and avatar).
That depends on export-ability of said models and powertrains etc, which from all i can make out is vastly better for these better, more expensive models than the all-new Punto will be, given FIATs geography of retail markets, of plants, etc.
They really must leave the more-commoditised car models for Tata to fight out, and restrict themselves to technology and manufacturing-quality supply services to tata at the jv. Tata has the commitment financially to do so, and its brand trust and pull is next-best in our market after the top 4 brands.
The only issue with such a strategy would be the dealer body: how many can the FIAT brand-sales volume then support, where and at what sales+dealer-margins run-rate?
i dont know why are u aruguing, the fact of the matter is FIAT is not selling and will not be selling in India. These aruguments only consoles one that they have bought FIAT the BEST car in the market.
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