Fiat ends distribution agreement with Tata Motors

The marketing initiative will see the Italian auto major spending over Rs 30 crore in just about six weeks beginning next week.

Last Updated: Apr 10, 2013, 21:56 PM IST

Mumbai: Struggling Fiat India on Wednesday reiterated its resolve to net 1 percent of market by year-end and said it is refocusing on the market with aggressive dealership additions and an all-out marketing push.

The marketing initiative will see the Italian auto major spending over Rs 30 crore in just about six weeks beginning next week.

"We will more than double out exclusive dealerships by the end of the fiscal from 51 now. We are also hitting the market with an aggressive media campaign from next week to reiterate our commitment to this market. We will be out there on all media as part of a six-week campaign," the newly-appointed Fiat Chrysler India president and managing director Nagesh Basavanhalli said here on Wednesday.

The company also announced the end of the marketing and dealership alliance with the Tatas effective April 1.

The second element of the refocus is more customer interactions, he said, which includes offering a 3-year/1 lakh km free warranty and an two more additional years of warranty or 1.5 lakh km, whichever is earlier.

In a bid to push the sales and operations here Basavanhalli was appointed as the head of operations here on April 2. Previously, he was heading Fiat and Chrysler's Asia-Pacific technical center located in Chennai.

When asked about the investment on this campaign, Fiat Automobile India director Enrico Atanasio said that it will be over USD 6 million or a tad over Rs 33 crore at today's exchange rate.

Whether the company is confident of meeting its stated target of cornering 1 percent of the car market with just two models-the compact Punto and the sedan Linea-and the adverse market and economic conditions, Atanasio answered in the affirmative.

"In 2011, we had 0.7 percent market share, which came down to 0.5 or thereabout in 2012. The decline was due to the confusion amongst customers after we decided to call of our six-year-old marketing alliance with Tata Motors. So I don't think it is an impossible task to double our market share to 1 percent.

"The forthcoming campaign and the more than doubling of our sales and service networks will easily ensure that our recently stated target is achieved," Atanasio said.

The India refocus strategy also includes the setting up of the 'national sales centre' with a 60000 sq mt car parking space in Mumbai, Atnansio said.

Last December, Fiat had said announced its re-entry into the jeep market in the country, currently dominated by the Mahindras and the Tatas, with two roll-outs, the iconic Cherokee and Wrangler brands, next year.

The rollout would be part of the Italian auto major's plans to introduce nine products, including new ones and variants, by 2016, Fiat-Chrysler Asia Pacific chief operating officer and president and chief executive for jeep brand at the Chrysler group Mike Manley had said in Mumbai.

Fiat, which currently sells only two car models, Punto and Linea, has under 0.5 percent market share in the domestic auto market, though it has been one of the oldest foreign brands in the country having entered here as early as in the 1950s, first in association with the Mahindras and then with Premier Automobiles.

"Our vision for this market will revolve around a three- pronged strategy. First, introduction of new vehicles that will include the Jeep brand. Second, the expansion of our independent dealers and finally strong marketing initiatives," Manley had said.

On Wednesday both Atnansio and Basavanhalli reiterated the roll out of the all these new models as per the plan, saying the current market environment is temporary.

According to the plan announced last December, Fiat would launch two international Jeep models this year, and later, two local models.

Fiat and its American unit Chrysler, in which it took a controlling stake in 2009, will launch the Jeep models towards the end of 2013.

Apart from the Fiat and Jeep, Fiat also has plans to launch racing car brand Abarth here this year. Jeep vehicles will be distributed at launch in the metros through 25 exclusive outlets utilising the infrastructure created by the Fiat exclusive dealers.

The Jeep Wrangler and the Grand Cherokee will be imported as completely-built units and marketed by Fiat, Manley had said.

Fiat is also reportedly developing a compact sports utility vehicle by 2014.