Fiat’s failure in the Indian automobile scene, analyzed

07 Fiat 500

Fiat. Four letters in the English alphabet put together by Italians, that actually stands for Fabbrica Italiana Automobili Torino, but also one, that depending upon (a) where in India you are from, (b) what your age is, and (c) how clued in you are to the European car industry can mean very different things to you.

Of course, I am referring on one side to the Fiat 1100D which was sold in India in 1964 to 2000 as the Premier Padmini by Premier Automobiles Limited under license from Fiat, and competing against the Hindustan Ambassador here in India.

But there is another Fiat, to those of us who love our cars, and what cars mean to us. We follow the European car market like there is nothing on earth quite like it, and by now, India has moved forward to such an extent that when the VW Polo came to India, such a lot of people (including my dad and multiple colleagues) decided to go for it over the Indian cult favorite, Maruti Suzuki Swift.

But here is where the history lesson ends, and my real reason for writing this blog first rears it’s head*. Even after all these years in India, and even after countless lessons from the Indian market, and the maturity of the car buyer, not just in cosmopolitan and urban areas, but even in tier 2 and tier 3 cities, Fiat India somehow is still getting it wrong!

This blog post has had it’s fair share of research. And yes, if you would like me to keep it coming, I surely shall***! But what on earth has Fiat been thinking? Do they not want the market share? Have the Italians (God bless their souls) forgotten what they stand for globally, and yet completely lost it?

My beef, for want of a better term, is this; Why has Fiat not bothered to sell the Fiat 500, that took the global small car world by storm in 2007, and still continues to do so, and instead focused on the Grande Punto in India? I have personally checked the internet, talked to Fiat officials in every fiat showroom I have been to, checked out every automobile magazine I could lay my hands on, checked out their web pages, even checked out team-bhp, and yet, NOTHING! There is absolutely no word any where on why Fiat and/or Fiat India have decided to keep mum about the subject. And the following points are going to be my way of bringing about a great awareness to the Indian car buyer; my two cents in the impossibly large virtual universe that is the internet. Hopefully, Google search will pick up on it! People madly in love with Fiat will shout it from the rooftops! And someone at Fiat headquarters will read this blog, and give the green signal!

1. First things first. The average Indian has been given to understand that the Fiat Grande Punto is a substantially cheaper car than the Fiat 500. To drive that point across, it has so far been brought into India only as a CBU (Completely Built Unit), thereby actually getting it to cost upward of 20 Lakhs on-road. But again, why?

I checked out the Fiat UK webpage****  and guess what? The price difference between the base versions of both the cars, as of today, is £245 or Rs. 23,640.

Sure, the base 500 costs £10,420 or Rs. 10,05,000 in Indian Rupees, but you gotta admit, the Punto starts at £10,175 or Rs. 9,82,000 in the same country, but in terms of the Indian market (with localization, I agree), starts from Rs. 4,65,000 Ex-showroom! By that calculation, the 500 should start from roughly Rs. 4,77,000 Ex-showroom, all factors like localization, and charges being identical! Factor in the style factor, the wow factor, and you suddenly start feeling curious. Why doesn’t Fiat India want Indians to have what is widely understood to be the better car? Why indeed!

2. Mileage. That (often annoying) question that wells forth undeterred from deep springs in Indians that the rest of the world has only now caught up to! Could that be the reason? I’m afraid not!

The new Punto Evo (Surprise! Surprise! The facelift that was launched in Europe in 2012 and does not exist any more!) weighs in at anything between 1144 and 1240 kilos, compared to the Fiat 500, which manages to weigh between 865 and 980 kilos, again, speaking volumes about mileage and even acceleration.

3. Engines, raw materials and localization. The same 1.2 petrol is the base engine for both the cars, and unsurprisingly, it is the same Diesel engine (the 1242cc Multijet) that powers the disel version of the car as well. Of course, additionally, Fiat offers a brilliant 900cc Twin cylinder Turbo petrol (called the TwinAir) tthat actually slots in below the diesel versions.

Also, we need to remind ourselves that the amount of sheet metal is significantly lesser (the 500 is just over 3.5m in length compared to the nearly 4m long Punto.

Yes! I understand that the 500 is not as spacious as the Punto, nor is it going to be as comfortable, being as it is, a 3 door hatch, as opposed to a 5 door. But here’s the thing! The Punto, even as a 5 door, is hardly competent with the market in terms of all that it provides, whereas the 500 has the capability to take the Indian car market by storm, because significantly, it has the style and that elusive x-factor to take on all the competitors, and leave them in the dust. And if you still want a Fiat 5 door, you do have one with the 500L.

4. Configuration & Exclusivity. This is something that I’m sure everyone wishes will just take off in India. There are no factory authorized configuration options in the cars being sold here. Just take a look at the Fiat 500 UK website, and the sheer number of options, on a car that possibly belongs to the cheapest bracket of cars you can buy, provides over 10 different wheel options, and as mentioned on the Autocar UK review, allows for 549,396 different ways to specify your car! To put that in common English, over 5 lakh people could buy their Fiat 500 in India, and possibly, no two cars would be the same!

5. Abarth! The performance arm of Fiat, Fiat India has happily launched the Abarth 500 here in India at a BMW X1 comparable 22-24 lakh rupees, whereas if you look at Abarth’s UK website, it retails there from £14,560 or £4140 more than the standard 500, giving you the performance variant at the equivalent of Rs. 6,65,000! That would mean, that even with taxes,, and everything else that the Indian Government and the State Government and the Insurance companies can throw at you, you own the Abarth 500 at less than 10 lakhs, and… wouldn’t that just be swell?

Also, and this is something I was actually quite surprised about, but even the Fiat 500SS, which has base 1.2 Petrol engine, which produces next to no power at all (69 bhp) has such decent handling I use it to learn any circuit in the Gran Turismo GT5 & GT6 gaming series. There is no Punto on my GT6, but I do have the Abarth 500, and the Abarth Punto, and despite a 20 bhp power deficit, as well as being cheaper (in the game), I managed to get a 2 sec faster laptime on the very technical Ascari circuit

Ascari circuit

My laptimes: on Gran Turismo 6, standard setup, dry, no driver aids, Logitech GT wheel.

07 Fscari track laptimes - GT6
I guess my real gripe comes from the following factors though: That
(1) Fiat, and Fiat India do not seem to give any importance to the market that is available and that can be tapped. Yes, I do understand and fear the possible monopoly, but Indians do like stylish cars – we showed that with the Suzuki Swift years ago, and continue to do so with cars like the Mercedes Benz A-class, which was recently launched in India. And that fact that this is an Italian manufacturer, and has always been to be honest, known more for it’s looks than it’s mileage is even more of an annoyance.

(2) I hate the fact that auto journalism in India is not what it is supposed to be – there is no honest, unbiased work – all articles steer clear of the pain of the car buying public – we have a lousy set of choices, no matter what we would like to buy, and that kills me! I mean, Mercedez Benz has consistently tried to bring it’s best models into India, and it shows they respect the country, and the inhabitants, even if the volumes they can sell are ridiculously small compared to a brand like Maruti Suzuki. And if they can do something like that, the fact that the brands that actually build the more affordable cars, do not put their best foot forward just drives me nuts!

And the reality of the motoring journalism industry in India, that avoids pointing out this reality just pains me.

(3) And no, this isn’t a manufacturer thing. I researched the list of areas where Fiat manufactures the 500, just in case they do not do so outside Italy, and again, you’d be surprised! The list includes Poland, and Mexico!

(4) By far, the greatest criticism to be aimed at Fiat and/or Fiat India, is their marketing and business tactics – I’m sure I am not alone in realizing that practically, every sales idea they have come up with is a dud! They even went into the market with Tata for some time, and sold their cars at Tata showrooms! Yeah! Swell idea! Really!

I mean, why does it feel like the average car buying public and even us Software techies and project managers feel like we have a much better chance of turning Fiat’s prospects around?!

Finally, common sense! I believe Fiat has profited so immensely from being engine supplier to Maruti and Tata, that they do not really care about their market presence. Which, if it really is true, is probably why Fiat’s market strategy in India is practically impotent. But guys, how difficult is it really, to tune your own engine and powertrain, so that it performs better IN YOUR OWN CARS than those of Maruti’s and Tata’s?

Update: Thanks to team-bhp member GTO for confirming with clarity my statement above with regard to Fiat being more Engine supplier in India than car manufacturer and making more than 80% of their turnover from being engine supplier in his post here.

* Disclaimer: Six blog posts! Six! I had to rant about something**, obviously, but I didn’t want it to be just about anything. Patriotism can have so many faces, so many expressions, and here is mine!

** and yes, writing about cars in a blog titled ‘hitchhike2heaven’ is, I admit, rather fetching, which is also why I just could not resist the idea!

*** you, the reader, ARE going to write in and ask me to do so, aren’t you?

**** not surprising, because from what we have been given to understand, the UK has quite badly paved roads everywhere, if auto journalism is to be believed.

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2 thoughts on “Fiat’s failure in the Indian automobile scene, analyzed

    1. Thanks Sundar! The point I’m trying to make here is not about importing the 500 into India as a CBU (in fact, Fiat already attempted it unsuccessfully in India) but to have manufactured in India yet. All things related to localization being equal, my contention is the costs should be identical, if not lower (considering there’s less sheet metal involved)

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