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Rumor : Fiat brand to Exit from India report

Discussion in 'Fiat India News' started by gazgotta, Sep 9, 2016.

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  1. SwifttoPunto

    SwifttoPunto Amatore

    Messages:
    54
    Bangalore
    Punto Evo 1.3 90 HP
    The analysis seems to be logical. Fiat has been tightlipped about their future plan. If they had something different they should have clarified when this kind of report/rumour started floating. Every manufacturer is talking about future product launches/plans to create confidence among buyers. But look at the answer Flynn has given which does not give any confidence.
    However they may not have taken decision yet. For jeep brand to succeed the success of localised c-suv is very critical. If it becomes success then Fiat may certainly stop Fiat brand. If not then they to change the strategy again. Hence 2019 is right. Assuming c-suv launch happens in 2017-2018 they have to take a decision in 2019.
    Main factor would not be customers or investment but it will be dealers. How far they stick to fiat and only jeep brand could makes business sense or not.
    prabhjot likes this.
  2. prabhjot

    prabhjot Esperto

    Messages:
    2,456
    delhi ncr
    @shanvimal

    Hi.

    FCA is #4 in europe: all brands put-together. Do look at my thread on FCA's global sales in the Fiat global news forum.

    Rem: FCA is a multibrand firm. e.g., in the usa FIAT is a mere side show. Jeep and Ram all the way. Chrysler is deliberately limited to its core-identity models the 300 and the Minivan (Pacifica.) In europe, FIAT also has a massive uv and vans presence (qubo and doblo to ducato), for suv-s JEEP, for small chic citycars and value-cars: FIAT. Dodge is deliberately limited to only rwd 'American muscle cars'.

    Under Marchionne FCA does NOT believe in full-lineups for each brand, at all. Each brand ONLY has a few models that fit its core, historic 'authentic' dna and image. No more, no less.

    In particular, they have deeply limited the FIAT brand to: europe centric chic city cars, plus vans, plus Abarth. With a few good-yet-economical to buy and own models (Panda, Tipo.) And: to LatAm.

    For India, then: under this approach FIAT is not a growth-in-asia brand. Jeep, Alfa and Maserati are (all 3 in china, japan, malaysia etc, just Jeep in India?) FCA's growing hugely in China with locally-made Jeeps and also with Maserati, soon Alfa too, they are less and less interested in FIAT for asia. Ironically, Japan buys way more fully-imported Panda-s and 500-s and Abarth-s in larger numbers at creamy prices/margins than made-in-India Fiats sold in India!

    FCA's whole-problem in India is that they do not have any India-appropriate new FIAT model they can build here in even a minimally cost-competitive manner, given the weak sales numbers the brand itself necessarily is constrained by in India (for historical reasons.) Also, they do not have demand for rhd India-made FIATs for exports. Hence, the 'all in' with Jeep, the Tata collaboration on their new suv-s, and of course exports.

    PS: the sales figures for the usa have been corrected. The anomaly concerns the length of the continuous sales- and marketshare growth 'streak' ("75 months") NOT the actual sales numbers, which are 'off' by 0.x % only. The issue has to do not with the sales and marketshare growth numbers which are entirely real and true, BUT with the potential 'fraud' involved in boasting to investors about a unbroken 'streak'. The streak ended in sept 2013, and was followed by another of 22months in length, rather than the unbroken continuous 75 months one FCA usa boasted of in its PR communications to investors and analysts.

    In sum: FCA is by a distance the fastest growing autofirm in the world, since 2008 and the merger: 260% growth in raw sales numbers since then, i.e., in 7/8 years, globally!

    Global #7 by sales numbers, bigger than: Renault, Peugeot-Citroen, Honda, BMW, Mercedes, Suzuki, Mazda, JLR-Tata Motors. And very very likely to be continuing to grow faster than most/all other large firms barring perhaps Mercedes and Suzuki/Maruti.

    FCA's sister firms (formerly part of 'FIAT'): IVECO trucks and buses, CaseNewHolland tractors+construction+agricultural machines, Ferrari, Comau manufacturing robots are also HUGE in their respective market regions/segments. Marchionne is also the ceo and/or chairman of all these firms.

    IMO that growth will now peak out in the usa and soon in europe too (although here FCA has many all-new models that've just-arrived with several more to come soon, mainly Jeeps and Alfa Romeo-s), but growth will pickup again in Brazil, as it already is a lot in Argentina+Mexico, BUT the big factor for fca will over the next few years be the large growth in the one region it has historically been very tiny-in: Asia, esp China, supplemented by Japan and India. Jeeps, Alfas and Maseratis, a few selected Chrysler+Ram+Dodges. Again, notice: FIAT is irrelevant in Asia for fca growth, by choice as well as necessity. FCA sold 9000 locally-made Cherokees and 4000+Renegades a month ago in China alone, with the new c-suv/Compass (a hugely popular imported-only nameplate for Jeep in china so far) coming there soon, like it is to India as well.

    Point is: FIAT's just a localized (europe+turkey+latam), limited-segments brand for FCA. It is NOT either a global brand, a full all-segments brand, or a global-growth one, AT ALL. FIAT sticks only to its core, historic brand history+dna+geography. More or less.

    Imo, that is the correct strategy, esp in Asia-Pacific (ex-China) which is totally-dominated by the Japanese and Korean firms (including in India.) Unlike say Ford, Renault-Nissan and GM/Chevy in asia-pac (ex-china), FCA has other big, historic brands esp JEEP that folks in China, India, se asia are familiar with, and moreover has 3 premium/luxury/sports brands too (Jeep, Maserati and AlfaRomeo.)

    It does NOT need to fight in the hyper-competitive car baazars of Asia for the high-volumes, low margins sales of the FIAT-like segments, which are RULED already by the jap and the korean firms (from toyota to marutiS+Hyundai-Kia.)

    imo it does not need the Fiat brand in china OR (let's see if the localized Jeep c-suv and b-suv-s sell well-enough for viable sustainable delaerships in 2017, 2018)

    in India!
    Turbothinghy and varoon9999 like this.
  3. Krunal Bhatt

    Krunal Bhatt Amatore

    Messages:
    69
    Ahmedabad
    Ahmedabad
    Punto Evo 1.3
    Well, I dont think that can happen because,
    1. JEEP will be used as premium brand. Cheapest JEEP will be around 15 lakh(ex showroom). So, they need a brand which can be sold between 5 to 15 lakh.(Thats FIAT).
    2. In USA they masterd a formula, one brand for one class/category, i.e. RAM for pickups(from Dodge RAM to Exclusive RAM), Chrysler for c - d class sedans. FIAT for efficient engine and family vehicle. etc etc. That, I am sure will be applied here.sooner or later(by 2018-19) we MAY see more of FCA brands.And FIAT WILL have a role to play.
    3. India can be a manufacturing hub for them. For both lhd and rhd market. So, why not keep selling here. (Remember Nissan exports micra to both lhd as well as rhd market.)
    BUT BUT BUT... IT ALL DEPENDS ON SUCCESS OF JEEP. And if that happens then only they will again concentrste on FIAT. That means 2018 onwards. AND if JEEP too fails then not only FIAT but entire FCA will be vanished from INDIA.
    amitshedha and prabhjot like this.
  4. shanvimal

    shanvimal Amatore

    Messages:
    54
    Chennai
    Chennai
    Linea 1.3
    @prabhjot . Awesome details. Bowing down to you ☺
  5. prabhjot

    prabhjot Esperto

    Messages:
    2,456
    delhi ncr
    @Krunal Bhatt

    Yes, agreed.

    To add: (a) there will be a 10/12-16lakh b-suv (Renegade-like), JEEP-branded, built off an updated version of the current-indian Punto-Linea-Avventura 'platform'.

    (b) FIAT can be put in cold storage, with only 1 or 3 cbu models, and brought back (locally-made, mass manufacturing in large numbers: the only way in India) if and when the dealers' financial sustainability is assured by JEEP sales and service

    (c) if localized JEEP c-suv and the b-suv sales in the first say 2 years, are too weak for the dealers, then bye-bye Fiat

    (d) meanwhile there will be profits via tata's jeep-related suv-s from ranjangaon (an already profitable enterprise currently, even with the low sales of both companies' ranjangaon models) and there will be exports, which have high-assured volumes (rhd markets)

    (e) if, as i think is the case, they are aiming for the new Jeep/combined dealership body to be small and compact, more like Mercedes than like say Ford, then they do not need Fiat's 5-12 lakhs rupee models, since:

    (f) there is also Alfa Romeo to launch and offer them (cbu) in direct competition with Mercedes, Audi and JLR (bmw is dying in India, already.)

    (g) the powertrain sharing with other firms business will continue to do well, esp once the new emissions + fuel etc standards kick-in around 2020+

    (h) your point about India as manufacturing hub is valid, but ONLY for Jeep not for Fiat, and i guess only for rhd, indeed only more so after brexit: Britain as an export-destination is opened up as a possibility, to go with japan, australia, malaysia etc. This 'hub' could also and reportedly will be a 100%ckd-type assemble and re-export hub for 1 or 2 bigger, more-expensive models (i.e., the all new 2017/18 Wrangler family, and the refreshed Jeep Cherokee. Why? Because of the strong dollar and euro relative to asian currencies (and the british pound, post-brexit?), and of course the vastly lower labour costs-yet-with-good-quality.
  6. Krunal Bhatt

    Krunal Bhatt Amatore

    Messages:
    69
    Ahmedabad
    Ahmedabad
    Punto Evo 1.3
    @prabhjot
    Yes,
    Sales of JEEP b/c -SUV is indeed very crucial. And,They need to bring them as early as possible.
  7. Raaz

    Raaz Amatore

    Messages:
    199
    Andhra Pradesh
    Retro / Classic FIAT
    I don't think Jeep or similar costly products of FCA ever gonna influence the Indian market especially with that kind of heavy prices. Even if they half the price, they wouldn't able to sell them.
  8. Krunal Bhatt

    Krunal Bhatt Amatore

    Messages:
    69
    Ahmedabad
    Ahmedabad
    Punto Evo 1.3
    Other thing that comes to my mind is, If JEEP is success in INDIA then before Alfa Romeo, FCA will bring another american brand first. i.e. Chrysler OR RAM OR Dodge..
    Also, FIAT in Brazil has couple of Models(Mobi, Brazilian Palio/Uno) which can be brought to INDIA, once there are sufficient dealers across country.
    Last edited: Sep 13, 2016
  9. prabhjot

    prabhjot Esperto

    Messages:
    2,456
    delhi ncr
    @Krunal Bhatt

    yes, for the longer term, FCA once it has the Jeep dealership body (compact overall) established can (and will) use the 'combined', multibrand format they follow all over the world to introduce Alfa Romeo, and/or Chrysler hybrids/phev models, and/or Dodge performance vehicles too, to take a nice bite out of the German brand-dominated 'luxury' segment sales, all underpinned by the greater sales volumes of the localized Jeep c- and b-(Renegade-like)-suv.

    While for Fiat owners (once the FIAT brand is put in cold storage or withdrawn completely) there will be numerous official fca fass, but non-dealer, small third-party service centre workshops a la RS Motors in mumbai, DRS in gurgaon etc. Presumably?

    And Ranjangaon, apart from the Tata and Jeep localized models could easily also take on ckd operations for one or two further Jeep models (largely for rhd re-export, like the new 2017/18 Wrangler or the renewed 2018 Cherokee), and/or eventually even rhd ckd-re-export work for say a Dodge Challenger or a Chrysler 300 phev, or even rhd Alfa romeo ckd-s.

    i.e., FCA can become in India a quarter-in-the mass-market with the localized JEEPs and for the rest be entirely like say Audi or Mercedes in India, doing ckd work for domestic sales but also as a rhd-assembly/manufacturing export hub for some non-Jeep brands too.

    Meanwhile: revenues from the engines and amt business, and via Tata's ranjangaon models.

    IF the idea is to earn returns on investments in India: it is hard to argue against this model. FCA's own brands sales to-be somewhat- or very-premium or luxury or (in the longer-run future) plug-in hybrids etc, EVEN as mass-market revenues and profits are indeed still garnered via Tata and via MarutiS. Win-win-win.

    Sadly, this would only work if FCA drastically restricts any investments in the FIAT brand, if not subtract it altogether from India. The dealers' sutainability in this model ought to be the ONLY remaining decision-point: ensuring the new localized as well as ckd Jeeps keep coming fast-enough, and/or Alfa Romeo and/or the Chrysler phev brand is introduced in good-time with good marketing support etc. i.e., as long as the dealers principals are enabled to-be happy-enough, which is precisely where the FIAT going-independent-from-Tata failed, resulting in some dip in quality, and gradual closures etc.

    imo it is far far easier to keep premium/luxury-brand/model dealers on-side and happy-enough and incentivized to ensure quality and trust/assurance than it is to satisfy a giant dealer body catering to a high-volumes-low-margins mass market brand like FIAT, only more so in india, given the market's obsession here with dealership and after sales assurance (i.e., something that favours the scale economies of the dominant firms, aka MS, HY, and 1 or 2 others.)

    THAT will have been why the FIAT brand will have been retired-hurt (completely?) by FCA in India.

    Am increasingly certain (also based on inside sourced information cited by the VERY credible and reasearch-based french high-brow economics-newspaper Le Monde, seperate from the HT/Cartoq piece, in a recent article on FCA's withdraw-Fiat plans in India) that FIAT will indeed be more or less formally discontinued come say 2018/19.

    Other firms do not have this option in India: either because, like Ford or Renault-Nissan they have no premium/luxe/sportscar/suv-specialist brand with which to compete for good-viable-margins in India, and/or because they absolutely have no way to glean any revenues out of the mass market in other ways (e.g., factory manufacturing technology revenues like Fiat has at ranjangaon on tata's behalf, or engine supplies, etc.)

    imo It simply makes too much desi, grassroots, hard-won, hard-knocked business-sense/wisdom to indeed do so.

    Still, one still hopes the rhd-exports logic might apply also to a model like the 500X, which could then be partly localized here alongside the Jeep c- and b-suv. THAT would give Fiat a lingering foothold in the multibrand Jeep+Alfa etc longer term dealer-service-centre-model they're following and implementing all over the world, barring Brazil. Instead of being totally retired-hurt: retired ONLY from the b2 to c2 mass market, high-volume segments, retailing from dealerships with other sales from other higher-margin brands like Jeep, Alfa Romeo....

    Sadly: that appears most unlikely, just given export demand for rhd (say) the 500X or 500L, esp relative to their JEEP siblings.
  10. Krunal Bhatt

    Krunal Bhatt Amatore

    Messages:
    69
    Ahmedabad
    Ahmedabad
    Punto Evo 1.3
    When the rumors of FIAT's exit is going viral, FIAT decides to launch Urban Cross.
    --- Double Post Merged, Sep 14, 2016, Original Post Date: Sep 14, 2016 ---
    Well, you people may find it interesting.
    I communicated the matter to Mr. Mangesh Kodalkar. Here is our Communication.
    Me :
    Dear Mr. Mangesh,
    There are rumors going on social media that FIAT may exit from India to give "Space" to other FCA brands.
    I hope those are not true. And we will see new FIAT models in near future along with JEEP.
    Mr. Mangesh:

    Dear Mr.Krunal Bhatt,

    Thank you for your communication , appreciate your passion towards Cars & love to Fiat.

    Indian media is very competitive (which we don’t mind) and we believe that can sometimes make them speculative at times, in order to craft a story that can grab attention. For your clarity, Fiat and Jeep will co-exist in India. Since the formation of FCA, Fiat and Chrysler’s strategic Global Alliance new opportunities in India have come our way. These opportunities will give us a number of options for our Indian operations in the future. We are excited about our future in India with Fiat as well as Jeep. We have to constantly adjust and tweak our business strategies to make sure we can make an impact in the market. We will continue to make our existing Fiat portfolio attractive to consumers. The Urban Cross is the latest addition to the Fiat portfolio.

    Do let us know any assistance required for future , we & our Dealer team will be happy to help you.

    Happy Motoring.
    Last edited: Sep 14, 2016
    limraj, amitshedha, pabhishek and 7 others like this.
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