Fiat India’s dealer network shrinking – EXCLUSIVE

Fiat India is currently undergoing a tough time, which is well known and is preparing for new products in the Indian market, with a new executive, now at the helm of affairs. Post the separation with Tata, on the sales front, things are not exactly going Fiat’s way, despite opening up a new sales and service network.  It is learnt that the present dealer network of Fiat has been shrinking lately.

Fiat decided to part ways with Tata and in 2013 went solo, opening up a new independent network, which soon grew in excess of 140 dealers, across the country. However, with lack of new products, dealers started finding it difficult to sustain and few of them started quitting. Our sources reveal that around 25% of dealers have given notices to the company, for relinquishing dealerships. Even prominent dealers like Pandit Automotive, Pune, who had been one of the highest selling Fiat dealers in India, has recently resigned. Tuli Motors, New Delhi also has closed down its Fiat dealership.

The company’s rejuvenation started off well in 2008, being a JV with Tata Motors. The launch of the iconic Fiat 500 (as a CBU) was followed by the Linea and Punto in 2009, which were manufactured locally at the sprawling and modern Ranjangaon plant. Both the latter products received a warm welcome in India by Fiat fans and other buyers a swell and soon became pretty popular. Tata Motors were appointed as the distributor of Fiat cars and they were sold through the Tata Motor’s PVBU network, having a dedicated sales team for Fiat. While there were glitches and differences between the Italian and Indian giants, sales were decent for the first three years and despite carrying a baggage of the past, Fiat cars gained healthy acceptability among Indian customers and the fan following grew to newer heights.

However, sales had reached a plateau and also started dwindling by 2012. Major reasons cited were lack of new products and also the talked about small car project, which might have done good to the company, was shelved. The Linea, which had set benchmarks in its segment, started to experience a steep fall in sales, owing to competition from other manufacturers who started offering more powerful engines and hence raising the bar for the customers.

Though the Linea T-Jet was launched with pretty much fanfare and was hailed by the media and enthusiasts, it failed to connect with masses as it felt short in being promoted heavily. The common showrooms with Tata Motors did not help either. The Punto continued to maintain its sales figures though, as it was still competitive in its segment. The company introduced facelifts for both its products and also introduced the Punto based crossover, Avventura, but sales have not been encouraging, though the products by themselves, are superior to competition in many aspects.

Fiat has launched the Abarth brand of performance cars this month with the introduction of the Abarth 595 Competizione (CBU), to be followed by Abarth Punto and Avventura in the months to come. Though Fiat is mulling on all-new products by 2018, under Fiat and Jeep brands, its toughest challenge now is to sustain and keep its network viable until new products are introduced in the next couple of years.