Ankur Mathur Anurag Kant Mishra Keerty Siddharth Rout Akash Roy

Fiat India Struggle

Latest Development Of Fiat

Fiat Chrysler Automobiles (Fabbrica Italiana Automobili Torino) is an Italian automotive holding

company, which owns the Fiat Group. The Fiat Group contains many brands such as Ferrari, Maserati,

Fiat, Alfa Romeo, the Chrysler Group, Abarth, and Lancia. Fiat S.p.A. was Fiat Chrysler Automobiles'

predecessor, as it owned the Fiat Group prior to the merger.

On 29 January 2014, it was announced that Fiat S.p.A. (the former owner of Fiat Group) will be

merged into a new company, Fiat Chrysler Automobiles NV (FCA), incorporated in the Netherlands.

Fiat Chrysler Automobiles will become the owner of Fiat Group.[3] On August 1, 2014, Fiat S.p.A.

received necessary shareholder approval to proceed with the merger (which followed board

approval).[4] Technically, Fiat S.p.A. (which owns Chrysler through the Fiat Group) is merging into

the new Netherlands based company, and not with Chrysler.[5] The shareholders, board, and

executive management of Fiat S.p.A. remain the shareholders, board, and executive management of

Fiat Chrysler Automobiles, and Chrysler Group still remains a subsidiary.

Launch Of Maserati

Apart from the merger, Italian car maker Fiat is gearing up to introduce it fully owned luxury car

brand, Maserati, in India to bite into the growing luxury car market in the country. This will help Fiat

create a stronger image as a brand in the mind of the Indian customer. Maserati is a uber-luxury

brand and will compete with Bentley and Aston Martin. Maserati’s claim to fame in the auto world is

offering extreme luxury with superior performance. The auto maker plans to open exclusive

company-owned stores in major cities. The Maserati range includes Gran Turismo coupe, Ghibli

Sedan, Quattroporte and the GranCabrio. The last is priced at Rs. 1.5 to 3 crores bringing it in direct

competition with Bentley, Lamborghini and Aston Martin. Sales of ultra luxurious cars in India

account for only 1000 units but still represent a sizeable market for exclusive brands like Maserati

and Lamborghini that are produced in small quantities. Fiat was the brand to have a few decades ago

but lost traction when Japanese and other European brands entered the country. The company

returned in 2009 with the exceptionally good Fiat Punto and the gorgeous Fiat Linea. Although good

cars, they failed due a weak brand image and problems with after sales-service under the Tata-Fiat

JV.

The Maserati brothers started the brand that changed ownership over the years until it came to Fiat

in 1993. The brand languished until Fiat sold 50% of its share to Ferrari that ultimately took control

in 1999. Ferrari disengaged the clutch with Maserati, branching it off to Alfa Romeo in 2005 that

partnered Abarth group under Fiat control. It was not until 2007 that Maserati started making profits,

now back under Fiat. For fiat, Alfa Romeo, Maserati and Abarth are the top of the line luxury brands.

The Ghibli sports the same engine as the larger Quattroporte and competes directly with Mercedes E

class and BMW Series 5 cars. It is also an alternative to the Porsche and Audi A7 luxury sports sedans.

One can speculate that this is the model most likely to set wheels first on Indian roads. If German cars

are about reliability and class, Italian cars are all about panache and verve and there will be takers

for exquisite Italian styling married to power in the Maseratis.

New technologies fiat is working On

To help meet tightening global fuel economy and emissions standards, Fiat Chrysler Automobiles will

replace its four-cylinder engine line-up with a new family of engines that share common parts and

can be inexpensively customized for individual markets. Fiat Chrysler In 2016 also will introduce

gasoline-electric hybrids -- including a plug-in minivan -- to broaden the availability of fuel-saving

eight- and nine-speed automatic transmissions. It also plans to bring more diesel engines to North

America. The new four-cylinder engines will share technologies and parts, enabling them to be

tailored to individual markets faster and for less cost. Bob Lee, Fiat Chrysler’s powertrain chief said

the new engines will share common parts, such as pistons, fuel injectors and combustion chamber

designs. There will also be just two sizes of pistons.

• The company is working on a belt-alternator stop-start system.

• Gasoline and diesel engines will share many of the same technologies.

Performance

Fiat India Automobiles Limited is an Indian subsidiary of Fiat Group Automobiles S.p.A. of Italy. It

is the ninth largest Indian car manufacturer by sales in India. Fiat India Automobiles Limited (FIAL)

was originally incorporated on 2 January 1997. The company presently employs about 2600

employees and is located at Ranjangaon in the Pune District of Maharashtra. The definitive

agreement of the Joint Venture betweenFiat S.p.A (Italy) and Tata was signed on 19 October 2007.

The board of directors for this company comprises five nominees each from Fiat and Tata.[1] Earlier,

Fiat used to sell the 1100, 124 and Uno in India, manufactured under licence by Premier Automobiles

Limited.

FIAT has a manufacturing plant at Ranjangaon, Maharashtra, which has an installed capacity to

produce 100,000 cars and 200,000 engines, besides aggregates and components. The company plans

to double the production capacity for both car units and engines in the next few years.

International

FIAT (Fabbrica Italiana Automobili Torino) is an Italian automaker which produces Fiat branded

cars, and is part of Fiat S.p.A., the largest automobile manufacturer in Italy. The company, Fiat

Automobiles S.p.A., was formed in January 2007 when Fiat reorganized its automobile

business,[2] and traces its history back to 1899 when the first Fiat, or Fabbrica Italiana Automobili

Torino automobile, was produced.

Fiat in Europe

Fiat's main market is European one, mainly focused in Italy. Historically successful in citycars and

supermini sector, currently Fiat has a range of models focused on those two segments (in 2011, those

accounted for the 84% of its sales). Fiat does not currently offer any large family car, nor an executive

car.

Fiat in South America

Fiat has invested for a long time in South America, mainly in Brazil (where has been the market leader

for many years) and in Argentina.

The Brazilian range is similar to European one, with the addition of a special family which derives

from a common platform (called "Project 178"): Fiat Palio, Fiat Palio Weekend, Fiat Palio

Adventure, Fiat Siena, Fiat Grand Siena.

Fiat in the United States

Fiat has a long history in United States. In 1908, the Fiat Automobile Co. was established in the

country and a plant in Poughkeepsie, N.Y., began producing Fiats a year later. These luxury cars were

produced long before Chrysler Corp. started in 1925.[8] Fiat was sometimes used as a

jocular backronym for 'Fix it again Tony', referring to poor reliability and problems, such as rust,

which some Fiat owners in the United States encountered in the 1970s and 1980s

Fiat in Asia

Fiat's presence in Chinese market is poor compared to its European, Japanese, Korean and American

rivals. At the beginning of 2012, Fiat was only importing Fiat Bravo and Fiat 500 model. However, in

2012 Fiat and GAC opened a Joint Venture plant to produce the first Fiat vehicle specifically

developed for Chinese market ever: the Fiat Viaggio, a compact car derived by another model of Fiat

SpA group, the Dodge Dart

European Cars of the Year

1967: Fiat 124

1970: Fiat 128

1972: Fiat 127

1984: Fiat Uno

1989: Fiat Tipo

1995: Fiat Punto

1996: Fiat Bravo/Brava

2004: Fiat Panda

2008: Fiat 500[17]

Fiat In India In India, Fiat began its operations in 1997, when Fiat India Automobiles Limited (FIAL) got established at Ranjangaon in the Pune district of Maharashtra on January 2. Beginning its journey in the Indian Peninsula by selling the 1100, the 124 and the Uno models, which were manufactured back then by the iconic auto-clan of Premier Automobiles Limited, Fiat formed a joint venture with the illustrious Tata camp on October 19, 2007. Today, this Italian automaker ranks at the ninth position amidst the largest car manufacturers by sales in India. Having sold 23,551 vehicles in 2009, an impressive growth of 241% was recorded by Fiat in India in comparison to its sales count of 6,897 recorded over the year before that. In 2012, however, sales curves of Fiat cars in India slipped by a considerable amount, dropping down to a worrisome 6,000 that year from a fairly decent 16,000 recorded in 2011, in turn, shrinking the company's share in the Indian car-market to less than 1%. Following this massive drop in sales, the auto-giant from Italy has set a smart and aggressive comeback strategy into motion. Over the days to come, a number of new and attractive models are going to join the fleet of Fiat cars in the country, together with new variants of the existing models and a state-of-the-art version of the legendary Jeep marque. As per the plans laid out by the company, by the time 2014 turns to a close, a market share of 5% and a total sales count of 130,000 units would have been achieved by it. To make sure that these plans work out exactly the way they are expected to, Fiat India is working round the clock on getting as many as dealerships set up across the country by the end of 2013. As of May, 2013, the dealership base of the company comprises of 54 outlets. Having ended its distribution agreement with Tata on April 1, 2013, the Italian automaker is working very proactively on expanding its sales and services network in India. However, it is not just the dealerships that lie within the area of focus of Fiat. Its manufacturing base, comprising of a single plant at Ranjangaon, Maharashtra, with a current annual production capacity of 100,000 cars and 200,000 engines, is being worked on so that its production capacity could be doubled over the next few years.

Premier padmini is an automobile that was manufactured in India from 1964-2000 by the premier automobile limited, a division of the Walchand group, under license from Fiat and marketed initially

as the Fiat 1100 Delight – and beginning in 1973 as the premier padmini. The Padmini’s primary competitor in the Indian market was the Hindustan ambassador and Standard herald. Premier manufactured the Padmini at their Kurla plant in Bombay (now Mumbai) until they sold a

majority stake to Fiat SpA in September 1997. The licensed vehicle was initially manufactured as the

Fiat 1100 Delight. For model year 1973, the car was marketed as the Premier President and

subsequently as the Premier Padmini. The car, in its peak during the 1970s-1980s, achieved immense

popularity among youngsters, celebrities and women as compared to the Hindustan Ambassador, it

looked more modern in appearance, more fuel-efficient and was very easy to drive.

By the early-eighties, a more powerful version which offered 44 bhp (33 kW) at 5,000 rpm was also

available. Premier began to offer an air-conditioning system, tinted glasses, which was a luxury in

Indian cars at the time, in the padmini. The Padmini was only available with petrol engines until 1996,

when they introduced a diesel variant.[3]

From the mid 1980s onward, with the advent of more modern, cheaper and more fuel-efficient cars

from Maruti Suzuki, the popularity of the Padmini slowly began to wane. The liberalisation of the

Indian economy in 1991, which allowed foreign car manufacturers to launch operations in India,

began to sound the death knell for the Padmini. The Padmini was never able to compete with the

more modern, value-for-money and fuel-efficient cars manufactured by Ford, General Motors,

Daewoo, Honda and Hyundai.

In 1996, Premier tried to revive the sagging fortunes of the Padmini by introducing bucket seats, a four-shift gearbox, a more modern, powerful and fuel-efficient variant (S1) which had a Nissan petrol engine and gear box. A diesel variant (137D) was also introduced, whose engine was again from Nissan. The top speed of the 137D was close to 140 kmph, and fuel efficiency of 24 kmpl. The car's production finally ended in November 2000. At the time production ended, only the 137D was being manufactured Although Fiat has been a part of the Indian automobile industry for over a decade and a half, not many models have been launched from its camp in the Indian car-bazaar. The most popular entrants belonging to this clan have been the Fiat Linea sedan and the Fiat Grande Punto hatchback, both of which are locally produced at the Ranjangaon facility owned by the company. Although over the days to come, several new models are expected to make their way into the Fiat clan, expanding its portfolio and adding more charm to it, at present, only 3 models are featured on its lineup - Fiat Punto EVO, Fiat Linea Classic and Fiat Linea.

Fiats’s a diesel engine manufacturer vs. Fiat as a car manufacturer

FIAT has been one of the pioneers in the diesel engines. The use of the FIAT diesel engines by the

Indian automobile manufacturer goes way back to 1962 when Premier automobiles produced the

licensed version of FIAT 1100 and christened it as Premier Padmini (Carhistory4u.com, n.d.) which

used the FIAT engine. Passenger vehicle analysis report for the Financial Year (FY) 2012-13 shows

that Maruti Suzuki and TATA has a market share of 39.12% and 11.71% respectively and FIAT’s

market share stands at a meagre amount of only 0.26% (Aravindam, 2013). Therefore we have to

examine whether FIAT is adopting the right strategy to sustain in the highly competitive Indian

market by only selling the engine to these manufacturers rather than promoting their own vehicles.

Statistics also shows that the market share of FIAT in the Indian automobile industry is decreasing at

a fast rate. It has shown a negative growth of 56.87% in the FY 2012-13 (Aravindam, 2013). In

India Fiat sells more engines than cars.

Fiats diesel technology and its swot analysis:

Automobile industry makes a significant contribution towards the growth of a nation’s economy. In

the Indian economy, it has emerged as one of the booming sectors with a contribution of around 6%

to the nation’s GDP. Rising income, growing middle-class and a predominantly young population are

some of the prime factors that have propelled this growth. The continuation of this trend can

definitely make India one of the top auto producing countries of the world in the coming years. We

can critically examines the nuances involved in FIAT’s success in selling their diesel engines to

different companies and its failure in promoting their own vehicles.

SWOT ANALYSIS OF FIAT

The use of SWOT analysis goes way back to the early 1960’s (Learned et al., 1965). It is commonly

used to identify the strength and weakness of an organisation and the opportunities and threats in

the environment. Having identified these factors, an organisation has to build upon its strengths,

eliminate the weakness, exploit the opportunities and counter the threats (Dyson, 2002). Strength

and weakness are internal to the organisation and it examines the aspects within the organization

like personnel, facilities, location, products and service. Opportunities and threats are external to the

organisation and it examines the factors like economic, social, environmental and technological

which are present in the external environment. Thus, procuring the definition of Dyson (2002) to

identify the in-house strength and weakness as well as outward opportunities and threats, the

following SWOT analysis is performed for Fiat. Strength Fiat’s history dates back to 1889. Hence it

has a rich experience of manufacturing world class vehicles of various capacities. Fiat enjoys very

high brand awareness in India. Its presence for more than fifty years is one of the primary reasons

for the same. Have substantial stake in some of the finest car maker like- Ferrari, Lancia, Alfa Romeo,

Maseratti, and Chrysler etc. So compared to its major competitors in India, Fiat has the edge of

technology backed by a strong research and development team spread worldwide which can easily

be translated in creating an umbrella, under which all the above mentioned major players as key

buyers of different parts of a vehicle and thus can have effect of diminishing the supplier’s bargaining

power.

Weakness

Despite of its presence for fifty years, Fiat has a very small market share of only 0.26% in the Indian

Automobile market. Maruti Suzuki, the market leader enjoys a market share close to 50%. Fiat needs

to improve its market share to remain relevant in the highly competitive passenger car market of

India. One of the biggest weaknesses of Fiat is it poor sales and service network. Fiat has failed to set

up a strong sales and service network in spite of its long presence in the Indian sub-continent. The

failure of the Joint Venture with Tata Motors is another setback in this regard. This in result has

reduced the capability of backward integration and eventually low acceptance of the product/cars in

Indian market.

Even new players like Volkswagen, Honda, Ford, Renault, Nissan etc have substantially ramped up

their Indian distribution network in the recent past. Fiat offers just two models Grand Punto and

Linea (excluding Fiat 500) in India. The product portfolio is too small to stay relevant in the market

when the market leaders like Maruti Suzuki is offering 16 models followed by Hyundai with 8 models.

Fiat has also failed to provide periodic facelifts to its models to stay competitive in the market. In

India the car makers are providing facelifts in every 2-3 years.

Opportunity

The Fiat 1.3 Multi-jet engine is very popular in India. Maruti Suzuki, Tata Motors, Chevrolet are

outsourcing this engine in high numbers and also some of their bestselling models like Swift, Swift

Dzire, Indigo Manza etc. are powered by it. Fiat can launch its global models like- Panda, Bravo,

Freemont, Dobloetc in India to provide a healthy competition in the market.

Fiat can also launch its other brands like- Alfa Romeo, Maseratti, Lancia, Jeep, Chrysler etc. have a

greater presence and consolidate its market share in India. By increasing the no. of models the

company can increase its presence in the market and can address a larger market segment with finer

variances in choices.

Threat

With home grown strong players like Maruti, Mahindra, and Tata Motors along with the presence of

almost all major global car makers, Indian car market is a tough nut to crack. Fiat models have always

received a good response in its launch but the lack of service network and reliability has made the

customers stay away from it. The biggest challenge for Fiat now is to regain the lost customer trust.

Though many car makers are outsourcing their diesel engines from Fiat, they are also working to

develop their own power plants as it provides more room for cost reduction. In the long run Fiat

cannot be sure of generating revenue by selling engines. Even Honda, which is known for gasoline

engines have developed a 1.5 litre diesel engine to power its top selling models of Amaze and City in

India.

Fiat’s USP is its highly acclaimed 1.3 Multijet engine. But by supplying engines to other car makers it

is fast losing its advantage over other players because a normal customer is unaware about the use

of Fiat engines by other car makers. In India, the price of diesel is cheaper than petrol (due to

government subsidies) which is one of the primary reasons for the popularity of diesel cars. But the

gradual withdrawal of subsidy in diesel will encourage customers to switch to petrol vehicles and

which may in turn reduce the growth of diesel cars in India.

Fiat revenue fall

Italian car manufacturer Fiat has been facing quite a rough patch of time in the Indian market. But

the month of August 2013 has brought a wave of relief to everyone in the Fait dug out as the sales

figures for the vehicles produced by Fiat have finally reached the four digits milestone for the first

time in the on-going fiscal year.

In the month of August, Fiat sold a total of 1003 units of vehicles in the Indian market which ensure

its market share to be 0.55%. This is a commendable breakthrough for Fiat since the starting of March

2013 as in that same month maximum number of cars Fiat managed to sell was 470. At the present

moment of time, Fiat has only two models rolling in the Indian streets, one is the Fiat Linea and the

other is the Fiat Punto. Both the sedan segment models have shown growth in sales at the individual

levels; the Fiat Linea was sold at a number of 222 units which embarked an increase in the Year-on-

Year movement by a whopping 196.0% ,120 units of Linea were sold in the March 2013. The Fiat

Punto also enjoyed the increase in the sales which increased by 439 units compared to the initial

figures of the fiscal year; 781 units Fiat Punto were sold in August 2013.The reason for the increased

demand for the Punto can be speculated to be the launch of its diesel variant Punto Sport which was

sold in considerable amount. The Fiat Punto recorded a 97.7% increase in the Month-on-Month

movement of the vehicles.

It which was being considered as an almost diminished car company has managed to bounce back in

the Indian market. Although producing 1003 units of vehicles among the total of 180897 units

produced is pretty negligible, but it can be said that Fiat has achieved a personal growth. Enthralled

by the new found success Fait plans to continue the streak by launching nine different models of its

vehicles which majorly include SUVs, Sedans and Hatchbacks, in the time period of three year. It is

also believed that among those nine cars Fiat might launch one in the fall of 2013 as well. Fiat also

has decided to expand its dealership from 70 to 100 in various parts of the country ensuring that it

reaches more amounts of probable buyers. It can be concluded that slowly and steadily, Fiat is

approaching towards a respectable position in the Indian Automobile market scenario.

3 tier strategy:

Fiat India is betting big on the passenger car segment with the four new launches in 2014. This,

despite a slowdown. Fiat has introduced the face lift model of Linea at the starting price of Rs 6.99

lakh (ex-showroom, Delhi). Along with this, Abarth 500, New Punto and Avventura are expected to

be launched later. Basavanhalli, president and managing director, Fiat Chrysler India operations said,

“The New Linea launched earlier this month has strengthened our position in the mid-size sedan

segment. We have a strong line-up of cars this year that expands the product portfolio and shows our

commitment to growth in India. India is one of the important strategic markets for the Fiat Chrysler

group and we have already shown our commitment by opening 100 plus dealership across the

country in a span of just over one. The New Fiat Linea and Abarth 500 along with Fiat Avventura were

earlier unveiled at the Auto Expo According to Basavanhalli Fiat India has made a significant growth

in sales from last eight months.

As a part of its three pillar strategy which focuses on service and dealership network, the company

has expanded dealer network and made available its spare parts at affordable price.

It has a target of appointing 150 dealers by the end of December 2014 from current 108 dealers.

Fiat is also eying the Indian SUV market and will launch a new model ‘Wrangler’ and iconic ‘Cherokee’

Jeep brands this year.

The company will distribute Fiat and Jeep vehicles in India through an independent dealer network.

At Ranjangao plant, Fiat manufactures 1.35 lakh car engines per annum and supplies to major OEMs

like Maruti Suzuki, Tata Motors and Fiat India itself. It has a installed capacity of manufacturing 3

lakh car engines in Ranjangaon facility.

Future prospects

Fiat India is betting big on the passenger car segment with the four new launches in 2014. This,

despite a slowdown in automobile industry.

Recently, Fiat has introduced the face lift model of Linea at the starting price of Rs 6.99 lakh (ex-

showroom, Delhi). Along with this, Abarth 500, New Punto and Avventura are expected to be

launched later in the year.

Nagesh Basavanhalli, president and managing director, Fiat Chrysler India operations said, “The New

Linea launched earlier this month has strengthened our position in the mid-size sedan segment. We

have a strong line-up of cars this year that expands the product portfolio and shows our commitment

to growth in India. India is one of the important strategic markets for the Fiat Chrysler group and we

have already shown our commitment by opening 100 plus dealership across the country in a span of

just over one year.”

The New Fiat Linea and Abarth 500 along with Fiat Aventura were earlier unveiled According to

Basavanhalli Fiat India has made a significant growth in sales.

As a part of its three pillar strategy which focuses on service and dealership network, the company

has expanded dealer network and made available its spare. It has a target of appointing 150 dealers

by the end of December 2014 from current. Fiat is also eying the Indian SUV market and will launch

a new model ‘Wrangler’ and iconic ‘Cherokee’ Jeep brands this year.

The company will distribute Fiat and Jeep vehicles in India through an independent.

At Ranjangao plant, Fiat manufactures 1.35 lakh car engines per annum and supplies to major OEMs

like Maruti Suzuki, Tata Motors and Fiat India itself. It has a installed capacity of manufacturing 3

lakh car engines in Ranjangaon facility.

Exhibit-1: Table of comparison among various car companies

Company

Production

Domestic sales Export

Ashok Leyland Ltd 782 775 7

Fiat India Automobiles Pvt Ltd

11,311 11,980 50

Force Motors Ltd 3,437 3,493 0

Ford India Pvt Ltd 133,975 84,469 48,088

General Motors India Pvt Ltd

78,426 80,890 4

Hindustan Motors Ltd 3,899 3,755 4

Honda Cars India Ltd 135,073 134,339 5,054

Hyundai Motor India Ltd 619,876 380,253 233,260

Mahindra & Mahindra Ltd 260,197 254,344 7,599

Maruti Suzuki India Ltd 1,153,596 1,053,689 101,352

Nissan Motor India Pvt Ltd 153,181 38,220 116,314

Renault India Pvt Ltd 67,566 57,368 14,930

SkodaAuto India Pvt Ltd 14,769 19,959 0

Tata Motors Ltd 203,782 198,812 6,981

Toyota Kirloskar Motor Pvt Ltd

154,260 128,811 27,276

Volkswagen India Pvt Ltd 78,521 52,528 32,588

Exhibit-2: Fiat additional prediction for upcoming year

Exhibit-3: Inter-company comparison of sales & in MoM basis

Exhibit-4: 2014 Revenue break up

Exhibit-5: Sales figure for Fiat 13

Exhibit-6: News on Tata-Fiat partnership

Exhibit-7: Revenue in 2009