20 October 2012

Abhishek Mishra on Fiat India

Fiat makes the best cars that nobody wants to buy. Here’s how it could dodge the problem

Abhishek Mishra
Car image

Fiat has had a tough time in India.

Even when other manufacturers had it good for the last couple of years, Fiat suffered. Of course, today the markets are so bad that even Maruti and Honda aren’t doing well at all. One has murderers for labourers and the other doesn’t have diesel engines for its cars. Fiat on the other hand has always been plagued by a disastrous retail strategy.

In June 2011, I had said that Fiat has consistently failed in our market despite having good products, and that the Punto/Linea seem to be going the Palio/Sienna way. One of the things I’d suggested they do was to get out of the retail agreement with Tata. They did discontinue the joint-branded showrooms a few months ago. Of course, only after they’d paid good money to hear some big consultants say it.

I can understand people staying away from the Fiat brand because of their peculiar retail situation; most were apprehensive of sales, service and spares. But a lot of people seem to not trust the quality of Fiat products. And that’s unfortunate.

I concede that Fiat has historically had problems with its electrical systems. The Uno’s radiator fan, for example, would not cut off even when the engine was not running, and drain the battery dead. Even as recently as a couple of years ago, TG’s long term Punto had a faulty left power window. But since all Fiats don’t have electrical problems, they just need more reliable systems.

So electrical systems aside, the car’s overall quality is more than acceptable. Especially when you consider that the ‘German quality’ cars that some manufacturers boast about are equally inconsistent. Fiat does more justice to Italian design than Volkswagen does to German quality.

Here’re a few facts about the Punto and the Linea. They have the best ride and handling package by far compared to the competition. Their high-speed composure is much better than that of many cars that cost thrice as much. But customers take these cars for a test drive around 10 blocks and end up not liking the car because “the steering isn’t as light as it is on other hatches”. True. However, if they’d driven the car at some speed, over bad roads and through a bunch of corners, they’d have a very different opinion.

Then there is that wonderful engine, the 1.3 MultiJet diesel.

An engine so brilliant that it does duty in cars like the Alfa Romeo Mito. And of course in India, in all Maruti diesels and most Tatas. Fiat can sit tight with the monies it makes from these two manufacturers in India. But I believe that the brand deserves better.

One of my best friends, an automotive expert himself, disagrees with me. He says Fiat’s real problems are its inability to retain dealers, poor spares availability and diagnostics, and shrinking margins on its products. Customers have lost faith in the brand and in such a situation there’s no way a dealership can meet any sales targets.

So what’s the solution? Well, certainly not Fiat Cafes selling the Fiat experience. I don’t see how selling coffee and paneer tikka sandwiches will do anything for the company. It needs to sell cars.

And the only way forward is for Fiat to seriously cut back on the number of dealerships in the country. Establish a strong presence in 15 cities and not look at expanding for the next three years. But can it do this with existing products? No.

Fiat will need to wait for the next cycle of products even if it wants to do this. Start small. Do it right. It might even want to consider getting the Dodge brand here when it reboots. A Dodge Dart would sell better than a Fiat Viaggio, despite being based on the same platform.

As will rebadged and restyled Puntos and Lineas. GM let Opel die in India so it could sell Chevrolet-badged Daewoos.

Fiat too will need to make way for Dodge if it is serious about this market.

Tags: fiat, punto, linea, dodge, abhishek mishra



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