The last of the links between Fiat in India and Tata Motors as far as sales and distribution goes has come to an end. While Fiat went independent with its sales and dealership network from May 2012, the distribution and outbound logistics piece was still being handled by Tata Motors. Fiat’s dependence on Tata Motor’s network will end in March.
From April 1, Fiat Group Automobiles India, Fiat’s sales and distribution arm, will be switching over to a new partner. Fiat has brought in their distribution and logistic partner from Italy to handle their logistics and distribution in India from their plant at Ranjangaon, near Pune. Mercurio Pallia Logistics will take over the distribution logistics of Fiat cars.
Mercurio Pallia a joint venture company between Gruppo Mercurio of Italy and Pallia Transport of India. Gruppo Mercurio is owned by Gefco Logistics. Fiat works with Gefco in Italy and some European markets. Gefco is a subsidiary of Peugeot of France and is into vehicle transport and distribution business across the globe with a turnover of 3.8 billion euro.
Robert DeCrick, head, supply chain management (APAC), Fiat Chrysler, said, ?They chose to go with an expert in the business rather than doing it themselves. This is not about fencing some agriculture land and starting to park on it. Unlike the car yards in India, the new Fiat stockyard was built on a solid surface with safety and security that ensure a better quality car was delivered to the customer. The yard also used IT extensively to offer better visibility for the dealership from invoice to delivery at the dealerships.?
On whether this investment in logistics would put an additional burden on the comapny’s costs, DeCrick said they did not view logistics as cost but as a key part of their business.
The new logistics partner will be able to handle customer demands better and with the use of technology dealers will he happier as they will be able to track their supplies from invoice to the delivery of cars at their dealerships, DeCrick said.
As of now Fiat has 25 dealerships and is adding six nee dealership in two weeks. The target is to reach 110 dealerships by December 2013. Fiat earlier had a network of 170 dealers through Tata Motors. Though the six year sales tie-up has ended, the manufacturing JV between Tata Motors and Fiat India remains intact.