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Discussion in 'Fiat India News' started by naveen2cool, Oct 31, 2012.

  1. naveen2cool

    naveen2cool Superiore

    Fiat to speed up engine output; to sell over 2 lakh engines in 18 months

    MUMBAI: Italian carmaker Fiat's India unit is set to supply over the next 12-18 months more than 200,000 engines, four to five times the number of cars that it will produce and sell during this period.

    The move will help the company's joint venture with Tata MotorsBSE 1.55 % curtail its losses, persons familiar with the matter told ET. They added that this will propel the company towards achieving cash breakeven by the end of this period, with higher volumes kicking in as 80-100 exclusive Fiat dealerships come on stream.

    Just recently the commercial activity of Fiat has been hived off into a National Sales Company registered as Fiat Group Automobile India Private Limited. (FGAIPL). All Fiat cars, Fiat sells, will be marketed and sold through this National Sales Company.

    The JV company will supply 100,000 diesel engines to Maruti SuzukiBSE 2.97 % and a few thousand to Premier, besides exporting 50,000 petrol engines, a senior executive said, adding that this will be in addition to the engines being churned out for Tata and Fiat cars.

    During this period, the company is likely to manufacture about 14,000 Fiat cars and 35,000 - 40,000 cars of Tata Motors at the Ranjangaon plant. This translates into utilisation of about a 40% of the company's installed manufacturing capacity while it will use 80 per cent of its installed capacity for making engines.

    Fiat's multijet diesel engine, which powers Maruti Suzuki's highly successful Swift and Swift Dzire models, will also be used in Premier's compact SUV Rio.

    Last year, Fiat had started negotiating with its Chinese subsidiary, with which it has a commitment of supplying 70,000 units a year of engine and engine components.

    "The realisations out of engines are one-fifth to one-sixth of the total cost of the overall car. And if you have five times more engines being sold than the number of cars, for sure engines will make up the lion's share," one to people in know of the development.

    The JV with Tata posted a loss of about Rs 288.69 crore in 2009-10 and managed to bring this down only marginally to Rs 227.04 crore in 2010-11 with increased component exports.

    However, the company's volumes in the domestic market fell 15 per cent to 21,066 units in 2010-11, when the overall market grew 25-30 per cent. The annual volumes took a further beating in 2011-12 with only 16,095 units sold, a 24 per cent decline in spite of hefty discounts of up to Rs 1 lakh. The JV further infused Rs 85 crore into the venture.

    With just a 0.5-0.6 per cent share, Fiat has slipped to the bottom half-dozen of the 19 passenger vehicle makers in India for 2011-12.

    source:Fiat to speed up engine output; to sell over 2 lakh engines in 18 months - The Economic Times
    saharsh and lowflier like this.
  2. sandipan_r15

    sandipan_r15 Superiore

    Grande Punto 1.3
    1 person likes this.
  3. naveen2cool

    naveen2cool Superiore

    Fiat bets on SUVs and sporty cars in India reboot

    MUMBAI/MILAN: Go specialist and go alone. That'sFiat SpA's new mantra for India as the Italian carmaker tries, once again, to crack the world's seventh-largest car market.

    Fiat, one of the first Western carmakers to enter India but now the worst performing, opens a new, fully-owned 57-dealer network on April 1, hoping to attract more of the 1.2 billion people in the world's second most populous country.

    Rather than launch a new model in the cheap, small car segment that dominates India and is ruled by Hyundai and Maruti Suzuki, Fiat plans to tap into fast-growing areas like sports utility vehicles (SUVs) and sporty cars.

    It will bring its Chrysler Jeep SUV to the country this year and build a small version of the car there by 2015, as well as take aim at the higher end of the market with Abarth, the sports version of its 500 and Punto models.

    Analysts think it will be a challenge, but could work.

    "I think Fiat's focus is on launching a couple of niche products and rebuilding the customer experience," said Deepesh Rathore, Managing Director of IHS Automotive India. "It's painful but it's the time to tell the customer that Fiat is different from the image he or she has had in mind."

    Fiat agreed in 2007 to build and sell cars with India's Tata Motors as foreign automakers began piling into the fast-growing market. But after three years of falling sales at dealers where Fiat's cars were displayed along the lower-priced Tata competitors, the Italian company decided in May 2012 to cut its distribution agreement with its Indian partner.

    A reboot is certainly in order. While Fiat's 1.3 litre MultiJet diesel engine is under the hood of 75 percent of India's small cars, the automaker sold just 203 Fiat-branded autos in February, the worst of any major brand, and its market share has dwindled to a mere 0.3 percent this fiscal year.

    "We all believe that we have scratched the bottom of the barrel," Enrico Atanasio, managing director of Fiat India told Reuters. "(Our performance) is not what the brand deserves."

    Now is not a great time for a relaunch. Car sales in India are set to fall this financial year for the first time in a decade, hurt by high interest rates and slowing economic growth.

    Yet the potential is there. LMC Automotive expects India's car market, currently around 2.6 million vehicles, to grow to about 6.9 million in 2017. That's around half its forecast for western Europe, although well below its projections of 16.9 million for the United States and 31.5 million for China.

    "India is a small, low-margin market for Western auto makers ... there is no indication of a near-term earnings upside," said Phillip Houchois, auto analyst at UBS.

    "But if you think India will one day be like China, it's nice to be able to put down roots there."

    With enthusiastic new dealers, Atanasio believes Fiat can end 2013 with 1 percent of the market and aim for 5 percent longer term. It plans to exit the year with 112 dealers, versus the 170 it had with Tata, and will continue to build engines and cars locally with the Indian company.


    A boxy Fiat sedan, built by Premier Automobiles from 1964 as the Fiat 1100 Delight, is a familiar sight in Mumbai where many still ply roads as Premier Padmini taxis. But more recently, its Punto hatchback and Linea sedan have not caught on.

    Fiat simply did not get the product offering right, Fiat Chief Executive Sergio Marchionne admitted earlier this month.

    Fixing it means introducing the Jeep Cherokee and Wrangler models this year, to grab a piece of India's booming SUV market, which LMC Automotive sees reaching more than 1 million by 2019 from just 363,000 last year.

    Fiat also plans in 2015 to begin production in India of a new mini-SUV Jeep currently under development, which will be sold locally and also exported to other markets, Atanasio said.

    Fiat took control of Chrysler in 2009, and has slowly been adding the U.S. carmaker's brands to its stable worldwide. In all, Fiat-Chrysler plans to launch nine new or refreshed models in India in the coming years, Atanasio said. Recently, India was the only place where Fiat was selling just one brand.

    It will not, however, launch a new model in the low-priced small car segment which accounts for around 70 percent of sales in India as middle class families trade in their motorcycles for four-wheeled status symbols.

    Instead, it will modify the models it does sell in India to suit local conditions, like the Linea sedan, built with a higher ground clearance for India's pot-holed roads.

    "Fiat will have to get its pricing and marketing strategy right for this model (segment) if its wants to be successful in India," said Ammar Master of LMC Automotive in Bangkok.

    source: Fiat bets on SUVs and sporty cars in India reboot - The Economic Times
    Last edited: Mar 27, 2013
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  4. anand3636

    anand3636 Amatore

    Cochin (KL - 44)
  5. bibin

    bibin Regolare

  6. prabhjot

    prabhjot Esperto

    delhi ncr
    Vidhyashankar Kannan likes this.
  7. Vidhyashankar Kannan

    Vidhyashankar Kannan Regolare

    Avventura 1.3 90 HP
    While this is good news, I do believe that the engine outsourcing business will be different from the sales business. There is no cross funding possible for the Fiat local sales unless the engine sales and Fiat's car sales are all under the same unit on the books. Anyway, it atleast means that the WORST that can happen is that Fiat may have to set up the network under the FCA name only and not have external dealers. Whatever it is, its decent news.
  8. Sagz

    Sagz Amatore

    Retro / Classic FIAT
    prabhjot likes this.
  9. asimpleson

    asimpleson Esperto

    Linea 1.3
    Mainly taxes and emissions and of-course probable Fiat's plans to introduce them on a larger scale on a later date.
    prabhjot likes this.
  10. prabhjot

    prabhjot Esperto

    delhi ncr
    If the Maruti S-Cross is even as light as the Ciaz (there is NO WAY Maruti will offer the Euro-spec build on this car), they do not need the 1.6 mjd!

    Fiat, on the other hand does, given the very heavy build quality of the cars, and given many folks' expectations of the Fiat brand. But their volumes are and will be too low to justify the investment?

    So yeah @asimpleson: the 1.6 and 2.0 mjd will i guess only be deployed once the Jeep+Tata SUVs come on-stream (by 2017?), and if the Fiat-brand volumes pickup enough, which as of now would seem possible only after the planned/professed 2016 b-suv launch in India (also with a rumoured Jeep sibling, below-Renegade).

    Especially now that petrol prices are so much lower, and diesel subsidies have been removed. I guess they feel it just is not worth the investment, and instead will rely on the t-jet for engine/brand distinction.
    asimpleson likes this.

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