Fiat to go solo within 18 months in Indian auto market

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After ending its 5-year old distribution alliance with Tata, Fiat expects to establish itself as an independent brand in Indian automobile market within 12 to 18 months.

May 22, 2012: Fiat India has recently ended 5-year old distribution pact with Tata Motors and is gearing up to set up a separate independent company in India to sell cars bearing its badge. The company has now declared that it will take approximately 12 to 18 months to be completely independent with nearly 100 exclusive sales and service centres in the country.

“The process of transition should get completed over the next 12 to 18 months,” said Enrico Atanasio, commercial head of Fiat India, on the sidelines of the inauguration of Fiat’s second exclusive sales and service centre called Fiat Caffe at the Koregaon Park, Pune. The company has also launched limited edition of its Fiat Punto Sport diesel at a price of Rs. 7.36 lakh (ex-showroom, Delhi) during the inauguration ceremony of second Fiat Caffe in the country.

Moreover, the auto maker is also looking forward to increase its market share in the Indian auto industry to about 1% to 1.5% in the next 36 months from the current market share of o.7%. Considering India and China as the two significant markets in its Asia-Pacific region strategy, Mr. Antanasio said, “Today, we have only 0.7% of the Indian market and we are not satisfied with this. In the next two to three years, we can grow to 1.5% level.” He further added saying that in every market where Fiat has its own factory, it has over 6% market shares.

In regards to dealerships, he said, “We estimate 80 to 100 dealers will be required initially in 55 to 66 cities to cover the market within 18 months to be on our own. Initially, we will focus on the top 35 cities.”

Fiat and Tata Motors ended their 5-year old distribution pact earlier this month, albeit they still retain the manufacturing joint venture. Today, Fiat cars are sold via 166 dealerships of Fiat-Tata across 126 cities in India. However, Fiat-Tata dealer will be establishing one exclusive Fiat outlet as per the new strategy.

In addition to this, the company is planning to set up new dealerships apart from those being already converted into exclusive Fiat dealerships. “The key objective of forming a separate company is to move the Fiat brand to the next level. We need dedicated, committed dealers for our brand,” Mr. Atanasio said. However, he did not commented on the number of models in the whole process of development of Fiat as an independent brand in the country.

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