The iconic Fiat brand has been present in India for decades but over the last few years, the company has been losing market share and straggling competition selling around 7,000 cars annually now. Fiat has drawn up a product offence strategy now and plans to aggressively re-assert its presence in India.
Nagesh Basavanhalli took over as President & Managing Director, Fiat & Chrysler Indian Operations, in April having moved from his earlier position as Head, Chrysler India Automotive, responsible for the Asia Pacific Technical Centre at Chennai.
Mr. Basavanhalli spoke to The Hindu about the company’s strategy and its push to regain market share in India. Excerpts:
The Indian automobile industry is witnessing a slowdown and sales figures are not very enthusing. Given the trying scenario, how is Fiat approaching it?
It is well known that in the medium-to-long-term, India is likely to be among the top five auto markets in the world. In the short-term, though, there are issues with car sales slowing down. The Society of Indian Automobile Manufacturers (SIAM) has reported figures with eight quarters being down and even year-on-year, car sales are down.
There are several things like macro factors and lack of demand due to changes in excise duty, overall situation with the pre-election year etc.
However, at Fiat, we are here to stay and have started out with a three-pillar strategy based on product, brand and network. On the product side, we have a product offensive with nine, new or significantly refreshed products to come. We are very product-focussed and a lot of the product initiatives as we go forward along with customer-connect initiatives are what will help.
We are expanding our exclusive dealer network where we are going it alone. On the brand side, Fiat is a brand that has been around a long time but I think part of the story that we are trying to bring out is that the brand itself has grown over the last 20-30 years and Fiat-Chrysler is today the world’s seventh largest auto maker. We are cautiously optimistic. We look at India as a growing and a strategic market.
Granted there are some headwinds right now but our products, our technology and innovation combined with the exclusive dealer network will probably get us out of this.
The company announced an aggressive product roll-out over the next three years along with Jeep products. Are we likely to see the Alfa Romeo in India too?
We announced nine new or refreshed products from the Fiat-Chrysler Jeep family. Right now, there is no plan to bring in the Alfa Romeo. But having said that, the Fiat brand has multiple products and at any given time, we could visit that possibility. The Abarth is an aspirational, fun-to-drive performance vehicle. We want to present something like a small sports car that is fun to drive. We see an area of the market where Fiat fans would be interested. It is a ‘less-than-volumes’ segment.
The SUV (sports utility vehicle) segment is growing and Jeep is among the best brands worldwide. We will start out with Cherokee and in future, we will announce the nameplates and prices.
Given that Fiat India’s product portfolio was stagnant for a while, is there a need to play catch-up given the highly competitive nature of the industry?
When we looked at the product strategy, the good part is if you look at the growing segments — B plus or C — which represents about 70 per cent of the overall car population in India, we are very strong players in both with Linea and Punto. And if you look at the last couple of months after we went exclusive, monthly sales are pointing in the right direction and we have a good momentum.
Are we playing in the right segment? The answer is yes. Do we have the right product strategy in place? The answer is yes. Are we connecting with customers and bringing more customers into the fold? The answer is that is a work in progress.
But by the end of this fiscal, we will have our product in the SUV segment, which constitutes another 10-12 per cent of the Indian market.
Clearly, pricing is an important factor. We are still working on the right balance between what our premium products stand for and what our customers would desire.
The Indian SUV segment has been growing very well amid very trying times for the rest of the automobile industry. What could be the reason for this?
I would say it is a logical evolution in the growth of the industry. Even in other markets, people initially transition from passenger car to a minivan or an SUV for the look, feel and the overall perception of the SUV. Clearly, there has been a surge in growth here.
The best part is we own some of the best SUV brands in the world and we are well positioned to play in that segment. We have looked at this segment and there are Indian SUV players at one end and premium SUV products on the other. There is room to grow.
What are the plans for localisation of production and what would be the mix of CBU (completely built units) imports and CKD (completely knocked down) localised, assembled products?
As and when we introduce more products for India, our goal is always to get to a high level of localisation.
Of the nine products, for some, we will start with the CBU route and transition to the CKD (localisation) route while for others, we will go directly to CKD with localisation — we will do a bit of both.
Where we feel we need to be quicker to market, we will go to the CBU route and in cases where we know where it is more price-sensitive and we need to localise more to get to the consumer base, we will go for the CKD route.
It is fair to say that most Fiat products will go through the localisation route while the Jeep products will initially start with the CBU route.
Fiat recently ended its distribution agreement with Tata Motors. What have been the benefits from the association and what are the plans for the dealer network?
We have had a great relationship with Tatas and continue to do so with the shared manufacturing facility at Ranjangaon.
On the service side, they continue to help us in the short-term till our network comes in.
It was an opportune time for Fiat to move to the next level so that we can show our prowess in world-class dealership.
We believe that the Fiat brand has grown and evolved world-wide and we want to give the world-class experience directly to the consumer. So it was our way of showing our commitment to our end-user.
Today we have 80 dealer partners with letters of intent (LoI) out of which 63 are up and running in a very short time.
Our goal is to give the customer the experience that he deserves through a world-class dealer network. We may have lost some of them in the last 10-20 years but we are determined to get them back.
You took over very recently and are in a sense starting a new chapter for the company. What is the imperative for Fiat in terms of brand, competitive positioning?
For me, it is a great time to be taking over. The brand to me has really grown and evolved. From a customer connect point of view, it is a great time.
They wanted their own sales and service points and that is what we are giving them.
Using the learning from the past, we have been working on the areas we need to work on.
An area of focus for us has been customer-brand connect and we launched a new campaign, ‘Make the Move’. Customers have known the Fiat brand for a while. Now is the time to come back to the Fiat family. The market is there for us, we have to popularise the brand now.