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Fiat India's revenues grow 88% after split with Tata Motors

Discussion in 'Fiat India News' started by bibin, Nov 18, 2014.

  1. bibin

    bibin Regolare

    Messages:
    297
    kochi
    Italian carmaker Fiat, which has found the going tough in India despite riding on Tata Motors’ distribution network, has posted robust growth in sales for FY14, the first full fiscal of operations since the company went solo.

    It has reported an 88% year-on-year jump in revenues from India at Rs 3,863 crore for fiscal 2014, according to data with the Registrar of Companies (RoC). The carmaker’s profitability before extraordinary, exceptional and prior period items also rose significantly to Rs 237.6 crore, 30% higher than the year earlier. Net profit, however, fell 19.5% to Rs 216.6 crore. The decline in net profit was due to an exceptional gain of Rs 860 crore that Fiat made in fiscal 2013, and which was absent in the last financial year.

    The Italian carmaker, which also owns marquee brands like Ferrari and Maserati, saw car sales in India decline from 22,587 units in 2009 to 8,801 cars at the end of 2013, due to poor visibility and a thin product portfolio. It had entered into a tie-up with Tata Motors to use the latter’s distribution and after sales service network for its cars in India.

    The association didn’t yield any favourable results for Fiat and it came to an end in March 2013. Since then, Fiat has been focusing on improving its marketing and distribution channel in India. It has also established its own dealer network and opened showrooms branded as Fiat Caffes across India.

    An email sent to the company seeking comment did not elicit any response. However, sources within Fiat India claimed that dealers showed more enthusiasm once Fiat moved away from Tata Motors to market and distribute its cars. This gave more clarity to the dealers in terms of Fiat’s future strategy and led to a rise in volumes, they said.

    Following the separation from Tata Motors, which has been finding it difficult to sell its own cars in the Indian market, Fiat’s sales in the country have improved. It sold 11,980 cars in FY14, 87% more than in FY13, at the end of FY14.

    During the period under review, the company’s employee benefit expense more than doubled over the year earlier to Rs 127, an indication that the company is ramping up manpower in the country, though there was no official confirmation of this.

    The carmaker is now focusing on scaling up its dealer network and product lineup. After setting up 108 standalone dealerships since April 2013, the company is aiming to set up 150 dealerships by December 2014.

    At present, the carmaker has four models for sale in India, including the recently launched Punto Evo. Fiat aims to have a lineup of nine models in India by 2016, which will include the soon-to-be-launched Avventura, a crossover utility vehicle, based on the Punto platform.

    Source
    http://indianexpress.com/article/bu...-perennial-laggard-fiat/#sthash.wb2tUMyx.dpuf
    ramjn, Raj_pol, cassini and 2 others like this.
  2. pemmasg

    pemmasg Regolare

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    359
    Chennai
    Surely there is a slow and steady improvement. All the best Fiat.
  3. nkrishnap

    nkrishnap Staff Member Janitor

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    1,900
    Bangalore
    Bangalore
    Linea 1.3
    How did the sales increase 87%? When the sales in FY13 is 8807 vs 11904 in FY14? Based on this number, the growth is 35.16%.

    The major source of revenue that is keeping Fiat going is the engine sales. The car sales will definitely be in red.
  4. prabhjot

    prabhjot Esperto

    Messages:
    2,445
    delhi ncr
    Thanks a ton @bibin

    I believe the manufacturing JV firm (Ranjangaon) and its accounts are seperate to the sales and marketing firm for Fiat India. The former is obviously making good (and rising) profits, while the latter must be in the red, but not by much. So, consolidatedly, for Fiat in India: profits? Despite all the negativity (too few dealers, dealers not good enough, inadequate marketing etc etc)!

    I believe Ford, Honda, VW, Skoda and Renault-Nissan are all sitting on huge accumulated losses (barring exports, possibly?), by contrast. Even Toyota has made 200+ crores of losses last financial year.

    Maybe the 'inept/lazy/timid' Italians know a few things about management and strategy in India that the other more celebrated firms (including Honda) don't?!! ;-)
    Raj_pol, cassini and mangeshtendulkar like this.
  5. dadasaheb

    dadasaheb Regolare

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    Last edited: Nov 18, 2014
  6. Murphy_Fiat

    Murphy_Fiat Superiore

    Messages:
    648
    Trivandrum
    Trivandrum
    Linea T-Jet
    Italian carmaker Fiat, which has found the going tough in India despite riding on Tata Motors’ distribution network, has posted robust growth in sales for FY14, the first full fiscal of operations since the company went solo.

    It has reported an 88% year-on-year jump in revenues from India at Rs 3,863 crore for fiscal 2014, according to data with the Registrar of Companies (RoC). The carmaker’s profitability before extraordinary, exceptional and prior period items also rose significantly to Rs 237.6 crore, 30% higher than the year earlier. Net profit, however, fell 19.5% to Rs 216.6 crore. The decline in net profit was due to an exceptional gain of Rs 860 crore that Fiat made in fiscal 2013, and which was absent in the last financial year.

    The Italian carmaker, which also owns marquee brands like Ferrari and Maserati, saw car sales in India decline from 22,587 units in 2009 to 8,801 cars at the end of 2013, due to poor visibility and a thin product portfolio. It had entered into a tie-up with Tata Motors to use the latter’s distribution and after sales service network for its cars in India.

    Fiat India claimed that dealers showed more enthusiasm once Fiat moved away from Tata Motors to market and distribute its cars. This gave more clarity to the dealers in terms of Fiat’s future strategy and led to a rise in volumes, they said.

    Following the separation from Tata Motors, which has been finding it difficult to sell its own cars in the Indian market, Fiat’s sales in the country have improved. It sold 11,980 cars in FY14, 87% more than in FY13, at the end of FY14.

    During the period under review, the company’s employee benefit expense more than doubled over the year earlier to Rs 127, an indication that the company is ramping up manpower in the country, though there was no official confirmation of this.

    The carmaker is now focusing on scaling up its dealer network and product lineup. After setting up 108 standalone dealerships since April 2013, the company is aiming to set up 150 dealerships by December 2014.

    At present, the carmaker has four models for sale in India, including the recently launched Punto Evo. Fiat aims to have a lineup of nine models in India by 2016, which will include the soon-to-be-launched Avventura, a crossover utility vehicle, based on the Punto platform.

    Source: Financial Express

    fiat-graph 1.jpg
    Ravi, prabhjot and varoon9999 like this.
  7. prabhjot

    prabhjot Esperto

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    2,445
    delhi ncr
    That's what an engine sales- and a JV manufacturing plant-based business model can do: it can make you money, UNLIKE EVERYone else, except Maruti and Hyundai!

    Now, Fiat: please bring the 1.5/1.6 mjd. Offer it to Maruti, first and foremost, and to Tata and/or GM too if they want. That way you'll get volumes and profits, while we will get it on the Linea/Avventura and whatever else you'll launch in 2016-17. :)
    cassini, limraj and VIJENDRA SINGH like this.
  8. jumu

    jumu Superiore

    Messages:
    969
    Chennai
    I fully agree with @prabhjot. Why is Fiat keeping its 1.6 under wraps?. No need to actually. Even if fiat plonks a gem of an engine under its hood, it is not going to make any impact on its sales like we saw with the tjet. So bring it on , share it with all, make money, so that fiatians will also get it. If the volumes increase because of that , then its a double whammy and super profits.

    Abdul
    prabhjot likes this.
  9. Raj_pol

    Raj_pol Regolare

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    495
    Bangalore
    Punto Evo 1.3
    @prabhjot & @jumu Small problem with the idea. While selling engines might be good for Fiat, if they do not sell start selling cars it is not good news for the expanding dealership. They need new products and they simply cannot do it with the Linea and the Punto alone.
  10. prabhjot

    prabhjot Esperto

    Messages:
    2,445
    delhi ncr
    @Raj_pol How dare you insinuate that the Avventura is not a 'new' product?!! ;-)

    But seriously: I think they've laid out their plans pretty transparently. It is clear that they are not going to bother with anything below the Punto. In fact the idea is to add another SUV above the Avventura at (or about) Duster prices (?) and to invest in Jeep in the d-segment, to go with replacements by 2017 of both the Linea and the Punto.

    i.e., they're happy with the revenues via the Tata Zest/Bolt/Vista/Manza, and the engine revenues and the export revenues (the JV plant exports a lot of components to Europe and Brazil, apart from fully built cars to S Africa and Australia for eg) as the foundation of their business model in India.

    You're right about dealers' basic viability, but that should not be difficult IF, as I am hoping is the case, the Avventura sells near enough as many a month as the Punto Evo, both sell with far lower dealers' discounts, and if they boost up Linea sales with the launch next year of the bigger diesel and/or amt gearbox? And continue the recent trend of a much improved quality and quantity of marketing/advertising.

    AND: keep a watch-out for the very radical move of merging/acquiring/equity-sharing/strategic partnership with Suzuki globally, once the VW-Suzuki dispute arbitration award is made sometime in the next few months.

    Fiat in India, like FCA all over the world, is strongly on the up, is not on as sticky a wicket as it was just two years ago. In that it is, funnily enough given the low sales numbers, unique since everyone else bar MS and Hyundai is struggling with (accumulated) losses.
    cassini likes this.

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