How the Jeep Compass came to be made in India
Perhaps, Ratan Tata’s friendship with Fiat boss Sergio Marchionne had something to do with the firm choosing India as a manufacturing base for Jeep Compass
New Delhi: Mark T. Allen, director of Jeep’s famed design studio, had not even in his wildest dreams thought about launching Jeep in India.
That was perhaps because Indians weren’t known to do a lot of off-roading, something the iconic Jeep is known for.
So, five years ago, when he and his team of designers were tasked with designing the Jeep Compass, a sports utility vehicle (SUV) for emerging markets, they had no clue that India would end up not just as one of the four manufacturing sites for the Compass, but as the export base for all right-hand drive models.
“We did not know anything about it. Just five years ago, every Jeep that we made was made in the US,” Allen said in an interview.
Ratan Tata, chairman emeritus of Tata Sons Ltd and an out-and-out automobiles man, may have had something to do with it, according to Allen.
“There is a real warm relationship between Mr Ratan Tata and our chairman (Fiat Chrysler chairman Sergio Marchionne). That’s probably how it happened. That’s probably the genesis of how we ended up by doing this car in India.”
The Jeep Compass is being manufactured at Ranjangaon near Pune, at a facility jointly owned by Tata Motors Ltd and Fiat India.
Fiat Chrysler Automobiles NV owns brands including Alfa Romeo, Dodge and Jeep.
Allen’s colleague and managing director of Fiat Chrysler’s India operations, Kevin Flynn, has a more mundane explanation to the firm’s India manufacturing move.
“The idea of building a Jeep in India was something that the company had already embarked on before I came to India two and a half years ago, and undoubtedly the influence of Mike Manley and his role as global head of Jeep and RAM Trucks...his engagement with India was immense,” Flynn said.
Credited with the success of the Jeep brand, which is growing faster than other group brands such as Fiat or Alfa Romeo globally, Mike Manley is widely seen as the successor to Marchionne. India, touted to become the world’s third largest passenger vehicle market in a decade, is a crucial frontier for Manley before he assumes a larger role at the group.
“So, he could see the potential. And as part of the global goal, India could play a strategic role, he believed,” Flynn said.
The move to set up an export hub in India and that too for Jeep models (some such as Renegade are expected in 2018) signals Fiat’s renewed interest in the Indian market, where it has met with little success despite a long association. After having sold its popular models such as the Uno and Fiat 1100—or Fiat Padmini—through a licensing agreement with Premier Automobile Ltd, Fiat set up its Indian subsidiary in 1997. In 2006, it signed an agreement with Tata Motors Ltd to jointly manufacture and sell cars in India. However, in 2012, it decided to call off the alliance and embarked on a solo journey.
The immediate requirement is not to make an Indian car for export but to make a global car in India for export and the local market, Flynn said.
“We will be exporting to very developed markets with very discerning clientele... How do we ensure global integrity so that wherever this car goes, it is the same car, which will deliver us a world-class car on the Indian roads, and we have never lost sight of those objectives,” Flynn said.
The process to achieve those objectives started four years ago. Back in May 2013, Mint reported that senior officials of the Fiat Group met component vendors to explore the possibility of setting up a manufacturing base in the country. The vendors were told that the Turin-based Fiat was looking to reinforce its manufacturing facilities for its Chrysler, Jeep and Dodge brands.
Such deliberations are required. High-end cars require expensive and top notch technologies such as hot-stamping and laser welding. All of that is now being done in India, Flynn claimed.
But, what about Fiat’s inglorious past in the country—a perception of good automobiles backed by a poor sales and an even worse service network?
“There is this perception you can’t get past. I have to address it,” Flynn said, claiming that he could provide 96% of the parts that go into a Fiat off the shelf. And that he could send a car to any part of the country in 72 hours.
To strengthen its service network, Fiat will also soon launch Mopar, an official seller of parts for Chrysler, Dodge, Jeep, Ram and Fiat vehicles.
Flynn expects Jeep to do well in India, and points to the country’s long-standing affection for the Willy’s Jeep. “If Willy’s Jeep was your telephone, your next Jeep is a smartphone yet with same consistencies, capabilities and other attributes.”
And it may cost a bit more too. The Compass is expected to be priced between Rs17 lakh and Rs25 lakh (ex-showroom, Delhi).