NEW DELHI – It was quite an experience for Naina Shankar, a young corporate executive, who decided to buy Grande Punto, the stylish compact car of Fiat. Surprisingly, Shankar received Tata’s Sumo Grande at her doorstep for a test drive. The dealer, who manages both Tata and Fiat brands, apparently got confused and sent Tata’s multi-utility vehicle to Shankar instead.
The confusion, say people associated with the industry, is not a one-off case and points to a wider on-ground problems in the joint venture between Tata Motors and Fiat. The two companies have a 50:50 joint venture — Fiat India Automobiles Ltd — for manufacturing cars and engines for both brands at a factory in Maharashtra. Fiat has also entrusted Tata Motors to distribute and sell its cars through the latter’s dealerships, which also provide after-sales support. It is here that the Italian carmaker seems to be facing issues, something that can be seen from its moderate run with sales.
While not commenting adversely on the experience with Tata Motors, Rajeev Kapoor, MD of Fiat’s India operations, concedes that the company’s sales could have been better, considering it has two competitive products — Linea sedan and Punto compact, both of which come with petrol and diesel engine options. “Yes, the numbers could have been better,” Kapoor told TOI.
Against 60 joint-branded dealerships last year, the Tata-Fiat sales and service network has grown nearly three-fold to 175 now. However, the network expansion has not helped much with numbers for Fiat, which has an abysmal 1.6% share of the market. While the company’s sales rose 208% in 2009-10, the actual numbers are very less compared to the size of the Indian car market as it sold only 24,806 units in 2009-10 against an overall market size of 1.52 million units.
While dealers refused to speak on the matter on record, some of them say in private that there have been issues after Fiat was incorporated within the Tata’s sales network. But things are improving and the Fiat brand is picking up, one of them said. However, a potential Fiat customer had an almost similar experience like Shankar when he visited a showroom and enquired about Grande Punto. “I wanted to go for the Punto, but I was discouraged. I was told that Tata brand Indica is a better bet.”
A look at Fiat’s sales numbers over the last six months shows its monthly volumes averaged just a little over 2100 units, less than even what an age-old car like Maruti800 does — at over 2500 units. When contacted, a spokesperson for Tata Motors said, “We are happy with the manner in which the joint venture is progressing as per plan. We are pleased with the performance of the brand in the market. Together, Tata Motors and Fiat are a force in the market.”
Fiat, meanwhile, is making efforts to improve the experience at dealerships to ensure its cars get proper attention. “Fiat has separate areas for sales and service, and we even have dedicated staff for our brands. Now we are in the process of increasing manpower at these dealerships and are focusing a lot on training them to convert inquiries into sales. We are giving it a firm push.”
Source – TOI
