Why Fiat's Indian feat has not been that spectacular

One would assume that a global brand that had some sort of a pre-liberalisation traction, would be best poised to capture a huge share of a more open, hungry economy. Except in the case of Fiat, one would be assuming wrong. It entered India via a licensing agreement with Premier automobiles in the 1950s and the Fiat 1100D more popularly known as Premier Padmini is only just being retired in Mumbai where it's been the definitive taxi for generations.

However, it's been an uphill drive for Fiat ever since it set up an Indian subsidiary in 1997. If Korean newcomer Hyundai roped in popular Bollywood star Shahrukh Khan, Fiat banked on Indian cricket sensation Sachin Tendulkar through the early 2000s. It created a Tendulkar signature model of the Palio, and in a widely publicised move, paid off the octroi on the sportsman's Ferrari. Sales, however, remained lukewarm. In 2006, it signed an agreement with Tata Motors to jointly manufacture and sell cars. However, things went horribly wrong. From a high of 22,756 cars sold in 2009, it slipped to a low of 11,143 in 2012. Last year, it decided to call off the alliance.

Nagesh Basavanhalli, its new president and managing director believes lessons have been learned. After 18 years in the US, he's been in India for near two months now to chart Fiat Chrysler's solo innings. Speaking of what went wrong, he says, "There are pros and cons of being a part of any network." The old dealerships being ill-equipped to handle a premium brand like Fiat was part of the problem, say company sources. As of now, it has a couple of models in the market — Punto and Linea. It plans to launch nine new vehicles over three years: four each from Fiat and Chrysler and one from the Abarth brand. With a range that includes Alfa Romeo and Grand Cherokee, Fiat's quite naturally proud of its heritage and that of Chrysler, acquired in 2011 (Read : Fiat bringing Jeep to India).

But automobile experts aver that could be part of the problem. "Fiat India is still living in the past," says Adil Jal Darukhanawala, editor-in-chief of ZigWheels, an auto magazine from the Times Group. He believes they need something like Renault Duster to script a turnaround. "I don't see Puntos and Lineas doing wonders for them," he says. Even the launches just may come too late to save the day at a time when the competition has its accelerators jammed. Darukhanawala admits, "It can't be just one model in four years."

"We have been told many times that we have become too big," Fiat chairman John Elkann reportedly told shareholders last month. "But these are things that only someone who has no idea of the size of the competition can say. We are too small," he added. This is especially true of Fiat in India, the world's sixth-largest car-producing market. In percentage terms, the Turin based automaker, the seventh largest in the world, has just 0.5 per cent of the market share. Compare this to 4 million cars sold globally and 84 billion euros in sales last year, due to handsome numbers in the US and European” 2.1 million and 1 million, respectively. Across Asia Pacific, it clocked a more modest 103,000.

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Despite having immense recall, the brand is unable to weave a colourful tale that customers relate to in today's market, says Smitha Sarma Ranganathan, a brand communication specialist. The script is derived from the self-image and identity that the brand wants to craft in the eyes of the consumer. While celebrity endorsements do lend a voice, script is endogenous. And Fiat has floundered even backed by the might of icons like Tendulkar and his cricket teammate Yuvraj Singh. "Fiat has not been able to decode this aspect in India — what the customer seeks to connect with and what it seeks to be in consumers' eyes," avers Ranganathan. Fiat's Basavanhalli thinks that finally the brand has got its script correct and is now making the right moves.

Its latest campaign is built around three stories high on emotional connect, one which talks about a young girl moving from the family Padimini to a new car. Apart from revamping dealership network, Fiat has pushed its consumer connect programme. In fact, its new-look Facebook page has added over 2 lakh members within a month. But will all these marketing and branding efforts push Fiat's growth trajectory in India? So far, it has been given a bit of a free pass because of a rocky partnership. "But now after going solo, if they don't succeed, they will have only themselves to be blamed," says ZigWheels' Darukhanawala

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