Case Study | Real reasons why Fiat left India

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Fiat’s journey in India has been an interesting one. It was a brand known to make cars that speaks compassion. Years ago, they used to sell the 1100 and 124 in India, which were manufactured under the license by Premier Automobiles Ltd (PAL).

The Fiat 1100 sold under the name Premier Padmini and the Fiat 124 under the name Premier 118 NE. During the 90s, Uno was introduced in India, again under PAL, and the rest is history. Uno was launched in 1997 and halted its manufacturing in 2000.

After that incident, Fiat brought in a few more vehicles. The entry of Fiat Siena came in 2000 and was halted by 2002. Amid 2001, Fiat released the Palio and the Petra and Adventure, and all these cars were stopped by 2010.

By 2009, Fiat introduced the Punto and Linea, and different versions of these cars were sold in India till recently. Due to the reason that none of these vehicles was BS6 complaint, they have all been halted in production and Fiat does not have any car in India on sale now.

So, what happened?

With PAL, Fiat launched the Uno in India. The Uno received a massive reaction from the audience, and there were more than 3 lakh bookings for the car within three months of its introduction.

However, PAL could only manufacture a little above 600 hundred cars because of labor issues in their plant in Mumbai. Due to this, the manufacturer received a bad name.

After this, they got into a joint venture with Tata Motors. Talks started in 1997 and received the official JV in 2007. But, people would look at the Linea and the Indigo Manza, and they would go for the latter because of reasons like price, space, etc.

Dealers would convince customers to go for the Tata cars since margins were higher. Fiat completely relied on Tata for spares, sales, and service, and this was a problem for them. Both parties were unhappy and parted ways in 2012, with Fiat starting their dealerships.

Brands like Maruti Suzuki, Tata, and Hyundai were offering highly fuel-efficient cars at a time when Indian customers were head over heels about fuel efficiency.

However, Fiat lagged. The Siena, Petra, Palio, etc., were not known for their fuel efficiency but rather for their build quality, design, and performance.

People used to dig Fiat’s designs, and they stood out for a plethora of reasons. But, the brand image was fading because of failed joint ventures, inconsistent quality of cars, unsatisfactory service options, and experience. A weak brand image meant a handful of customers in showrooms and gradually lesser showrooms.

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