Fiats new gambit

Written by Shweta Bhanot | Updated: Jun 28 2009, 04:05am hrs
Soaring heat and occasional dust storms on our way to Parwanoo in Himachal Pradesh couldnt mitigate the thrill of zipping across the national highways in the stunning Fiat Grande Punto. The car is engaging from the time you spot it. The 300-odd kilometers to the hill town went past pretty smooth as the Puntowith its suspensions tweaked to suit Indian conditions, strong chassis and large tyresmade its way effortlessly over the potholed tarmac and the bone-knocking speed breakers.

The long nose and compact rearangled high-mounted lightsgives the hatchback a sporty look.

A big hand for designer Giorgetto Giugiaro, Car Designer of the Century 1999, inducted into the Automotive Hall of Fame in 2002. He is the creator of the Volkswagen Golf and the Fiat Panda, and has styled more than 160 other cars including the Grande Punto. The interiors, however, are somewhat disappointing with less room than one would have expected from a four-metre long car. The plastic that has been used generously could have been dispensed with.

The Indian Punto is 43 mm smaller in length compared to the original. The overall length of Indian Punto is 3,987 mm compared to the original length of 4,030 mm. The idea was to qualify the Punto for the small car category and enjoy the excise duty benefit. The Grande Punto is avai-lable with two petrol engines1.2 and 1.4 FIREand one diesel 1.3 multijet. The power to weight ratio is to be watched. The car is priced between Rs 3.99 lakh and Rs 6.11 lakh (ex-showroom Delhi). It will have three versions, Active, Dynamic and Emotion.

The company is looking to sell 2,000-2,500 Puntos a month. Globally, the Grande Punto has touched 1.6 million in sales. The car will roll out from the companys Ranjangaon facility, which has a capacity of 2 lakh cars and 3 lakh engines, besides 3 lakh accessories. The facility manufactures the Palio Stile 1.1, 1.3, 1.6 models, the Linea and now the Punto. Fiats 1.3 litre multijet and 1.2 and 1.4 FIRE gasoline engines are roll out from this facility. It also manufacturers Tata passenger and next generation cars.

But the question is, will the Punto be able to turn the fortunes of Fiat in India Will customer confidence in the company return Will it be able to compete in the already overcrowded B plus segment in the Indian auto market

There are many such questions that still hover around Fiat. It is evident from the sales figures and market share the company holds today despite being around for decades. Last year, Fiat sold 8,087 units in India. In some measure, Fiat is associated with the Premier Padminis plying on Mumbai roads as the yellow-and-black taxis. Of course, you can still find them in a few private garages, but many customers consider the brand somewhat unreliable, with poor distribution and after-sales network.

It is this image that the company is hell bent on changing. Experts say the company has an excellent product portfolio but has faltered due to an incompetent pricing strategy and poor network, coupled with the time lag it has recorded in bringing products from its global portfolio into India. The launch of the Linea around six months back gave an indication that the company is changing tack. It made its re-entry into the C segment at a competitive pricethe Linea is priced between Rs 6.07 and Rs Rs 7.13 lakh for the petrol version and Rs 6.97-Rs 8.25 lakh of diesel (ex-showroom, Delhi).

Fiat has burnt its fingers more than once in the market with wrong pricing. There was a time when the dealers of the company started dropping out since they found the business unviable. Customers also shifted their loyalty when they began facing issues such as high maintenance cost and bad service network, explains an industry expert. He adds that the company needs a well-thought out launch plan and must keep the excitement around the brand alive with regular launch of new products.

Fiat has to really undo the unreliability part of connotation it has got from the Indian customers if it wants to be a mass market player, explains VG Ramakrishnan, director, automotive and transportation, Frost & Sullivan, South Asia and Middle East. He adds that while the company has struck the right chord by pricing its products competitively, strengthening of distribution and after-sales service network should be its priority now.

FIAL knows where it failed and sees the need to buck up. Says Rajeev Kapoor, chief executive officer, FIAL, We are working on our weaknesses. He adds that the company plans to be an important player in the market and sees growth potential in both the A and the B segments. The companys joint venture with Tata Motors has no doubt given it a new lease of life.

Sad the company has had to shelve its plans to import cars, including the Bravo, which was expected end of last year. Currently, the company sells the Palio, the Linea and the 500 in the country. Though it said that it has no plans to phase out the Palio, falling sales may soon force it through the exit door.