To leave or not to leave?
11th May 2018 5:00 am
Sergius talks about the fortunes of Fiat and how Jeep's entrance could mean a resurgence for FCA.
‘GM to Exit the Indian Market’ wasn’t a headline I enjoyed writing, but with the American giant pulling out of our market, it was a column I had to pen. Now I fear I’ll be writing a similar one for Fiat; but fingers crossed I won’t have to. The Italian brand currently struggles with abysmally low sales, a tiny and aged product line-up and hardly any viable global options. Last year, Fiat sold just 2,698 units, and that isn’t even a percent but just a fraction of a percentage of the market size. So winding up is a distinct possibility for Fiat.
Fiat Chrysler Automobiles (FCA) did switch tracks to Jeep too. SUVs are after all the flavour of the season, and in Jeep, FCA has a bona fide SUV brand, one with a history with India too. On the whole, the products are very capable and desirable, and while the pricey imported models haven’t found too many takers, sales of the locally built Compass are only headed north. Following the Compass will be the Renegade, another locally built, capable and what should be a well-priced offering. A compact SUV could also materialise in the near future. Thus, Jeep’s success could pave the way for an easy Fiat exit.
But then, maybe not. Jeep’s success will also be a compelling reason for Fiat to stay. Thing is, with Jeep in the volume segment, a local manufacturing plant and a pan-India sales and service network, limiting itself to just a subset of the market would be a thorough waste.
Yes, SUVs may be all the rage right now, but the passenger market is still dominated by hatchbacks and sedans, and Jeep isn’t making a sedan or hatch anytime soon. The company is very clear that every product bearing the Jeep name would have to stay absolutely pure to its off-road heritage and DNA, and off-road cars are far from being in demand. The Volvo S60 Cross Country anyone?
This brings us back to Fiat, its only volume segment car brand. Two models are often called out for potential India duty – the recently launched Cronos and the Tipo. The Cronos is a low-cost car based on FCA’s MP1 platform that isn’t in use in India, thus ruling it out. The Tipo is a possibility, being based on the Small Wide LWB platform (the same as the Compass), but there’s a fly in the ointment. The Tipo’s engines would have to be reverse engineered for our BS-IV standard or come in the BS-VI guise, both of which would make it pricer than its competition. Stalemate then? There is the possibility of outside help. After failing to work out a deal with the VW Group, Tata could still be keen on a partner for its AMP platform. Wishful thinking, perhaps. I’d better leave it to the men and women who actually run these companies then and wait and watch; yes, with fingers crossed.