Sergio Marchionne’s friendship with Ratan Tata brought Jeep Compass to India
With Sergio Marchionne’s death, the global automobile industry has lost a visionary CEO that helped transform the sector in the last 20 years
Mumbai: The Jeep Compass was not meant to come to India.
Forget about the country ending up being one of the four manufacturing sites for the Compass and also as the export base for all right-hand drive models.
At least that’s what Mark T. Allen, director of Jeep’s famed designed studio, thought in 2012 when he sat down to doodle an SUV for emerging markets.
“There is a real warm relationship between Mr Ratan Tata and our chairman (then Sergio Marchionne). That’s probably how it happened. That’s probably the genesis of how we ended up by doing this car in India,” Allen told this writer in Goa last year. “Just five years ago, every Jeep that we made was made in the US...,” he added.
That is how much Sergio Marchionne loved India and Ratan Tata, chairman emeritus of Tata Sons Ltd. Marchionne died on Wednesday after he fell gravely ill following complications during surgery in a Zurich hospital. He was 66.
In 2006, when Marchionne was fighting a tough battle to turnaround the fortunes of the erstwhile Fiat, he made a wild bet on India. Wearing his trademark black suit, Marchionne along with Ratan Tata announced an alliance at the Delhi Auto Expo to manufacture and distribute cars out of common facilities—a move that went horribly wrong for the Italian firm forcing it to significantly prune down operations of Fiat brand in the country and introduce Jeep. The rest is history.
The Jeep Compass today is one of fastest-growing SUV brand in the country and has given Fiat Chrysler a new direction in world’s fastest growing auto market.
But, why did he stick around with the Tatas for so long?
In Nano, Tatas had set an example.
“Their (Tatas) approach to globalization is interesting and one of the great things that I found about Tatas is the vision and commitment they have to nation building in India, which somehow the rest of the world has forgotten,” Marchionne told the BusinessLine newspaper in 2008.
“Sure, we have had differences of view which have been quickly reconciled but never a fundamental disagreement. There are times I discuss the weirdest things with Ratan, but that is the way we are. We are friends first and businessmen second,” he said.
“I had the privilege of knowing Sergio Marchionne shortly after the time he took over as the CEO of Fiat in 2004. The Tata-Fiat alliance in India took form in 2007 under his leadership and support. I also had the privilege of serving on the Fiat board for six years during which time Fiat registered growth and enhanced profitability, under the strategic leadership of Sergio. The global automobile industry has lost a great leader who will be remembered for his boldness and for his vision,” Ratan Tata told Mint in an email.
Marchionne was replaced as CEO of the carmaker last weekend and also stepped down from his dual role as CEO of Ferrari. Marchionne is known to have played a central role in the turnaround of the struggling Fiat Group into one of the most successful companies in the automobile industry.
The group then entered into a strategic alliance with the bankrupt US automaker Chrysler. Within two years, Chrysler had exited Chapter 11 and returned to profitability. In 2014, the two firms merged to become Fiat Chrysler Automobiles (FCA). In the same year, Marchionne announced that the joint company’s near $13 billion debt pile had been wiped out.
From being financially prudent to technologically-advanced, the global industry has transformed a great deal in the last 20 years and there are a few charismatic CEOs who can take credit for that. In the niche list of such visionaries, Marchionne finds a place along with Carlos Ghosn of Renault-Nissan, Dieter Zetsche of Daimler AG, Alan Mulally, the former President of Ford Motor Co., Akio Toyoda of Toyota Motor Corp. Ltd, and his old friend Ratan Tata.
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