Mumbai: Fiat Chrysler Automobiles NV is gradually phasing out its storied Fiat brand in India after a run of more than a century as the company sharpens focus on the Jeep brand of sports utility vehicles (SUVs) to grow its fortunes in the world’s fourth-largest passenger vehicle market, said dealers. Jeep has turned to be a success for Fiat ever since the company introduced the Jeep Compass SUV last year. With SUV demand staying robust, the auto maker is reworking its strategies to tap Jeep’s expertise and make a deeper foothold in this growing market.
To be sure, Fiat has not curtailed supply of spare parts for Fiat cars, but dealer sales targets and inventory are at a “bare minimum," said a dealer in Nagpur.
Three dealers, including the one in Nagpur, said Fiat is imploring them to allot more floor space at showrooms and boost marketing spend on the Jeep brand.
The Jeep Compass, which went on sale in July 2017, was critical to revive the company in India as demand for the Fiat brand of cars has been on the wane for years. Since its inception in 2015, the local unit had a “single-minded" focus on making the Jeep Compass a success because the company “couldn’t risk anything", Fiat India’s president and managing director, Kevin Flynn, said in a 27 September interview (read here).
Fiat plans to launch two more locally produced Jeep models in the next three years—a sub-four metre SUV placed below the Compass and a three-row SUV.
“Because of the historic links, we’ve to make some decisions on what best we do with Fiat," Flynn said. He did not say whether the company would phase out the Fiat brand.
To promote the Jeep, Fiat India is undertaking strategic marketing initiatives to showcase its capabilities, in addition to developing and migrating about 35 of its biggest Fiat dealers into Fiat dealers, to sell cars under the Fiat, Jeep and Abarth brands. Several other Fiat dealerships, which were unviable for years, were quietly shuttered.
Fiat India has also set up close to 70 dealerships exclusively for the Jeep brand, which can also sell imported models such as the Wrangler and the Grand Cherokee. Fiat dealers are allowed to sell only highly localized models such as the Compass.
Fiat, which started selling its cars in India in 1905, has a chequered history. Despite momentary wins such as the Palio and Uno hatchbacks, Fiat has been largely unsuccessful as it could not compete with rivals such as Maruti Suzuki India Ltd and Hyundai Motor India Ltd.
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“Getting a business model (for Fiat in India) to really stack up was a tough challenge", Flynn said, citing the intense competition and low profitability in India’s mainstream car market. He said it was “evidently clear" that the Jeep will find success here as more and more Indians are recognizing the “desire, demand and appropriateness" for SUVs because of the practicality, ride-high and road presence.
“Why would we try to create SUVs under the Fiat umbrella when we’ve got a brand that is the very creator of the segment? For India, with the way SUVs are growing and the demand for the future, I think it’s definitely where our focus needs to be now," Flynn said.
The Compass garnered more than 35% of total volume sales in its segment, comprising utility vehicles costing between ₹ 15-25 lakh, with 19,358 units, compared with the segment’s 54,416 units in the last financial year, showed data compiled by the Society of Indian Automobile Manufacturers.