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Fiat’s move to offer high-end cars will surely revive its batterred brand image
 
 
The sight of the Bravo and the new Fiat 500 at the Auto Expo in New Delhi during January 2008 was indeed refreshing, atleast for an ailing Fiat. Even though the company showed off its regular range, a strong feeling that Fiat is now betting big on recasting itself into an auto major which also caters to the premium auto market demands was evident. Analysts too contend that Fiat is now focusing on resurrecting its market image in the Indian market which has been distorted by its only mid-segment vehicles, inefficient after-sales service and poor reach.

With a fully-owned operation, when Fiat entered the Indian market in 1997, it had a tough task at hand. Apparently, unlike other players entering the market, there was no novelty factor involved with its launches. Though the initial models like the Uno and Siena managed to ring some bells, a product which could demonstrate Fiat’s contemporary appeal remained a far-fetched dream. Also, Fiat’s global car, Palio managed to bring in the much awaited volumes but even that was bogged by after-sales issues. Since sales could never recover even after improved customer interfaces, Fiat understood that its image problem could not be solved by merely launching new models. Today, even though these shortcomings have been rectified to an extent – thanks to the Tata Motors tie-up – sales have not been satisfactory. It is therefore argued that Fiat India, as a company, has perception problems and foraying into the premium Indian car market is a logical strategy.

According to sources, alongwith newer offerings in the mid-segments, Fiat India will also focus on the upper niches. This exercise will give the company a brand appeal and leverage among the masses that are easily influenced by the lifestyle patterns of the rich. A co-branding exercise with subsidiary Ferrari and Alfa Romeo will prove a logical alternative in the operation as well.
 
 
Currently, Fiat has chosen the iconic Fiat500 and the sleek Stilo for the task. The products are anticipated to be branded and sold like premium Italian products as a Fiat spokesperson admits, “As per our business plan we will import both the Bravo and the Fiat500 as CBUs. We will start the branding exercise as soon as we launch these cars…” As a start to the plan, the 1.3 MultiJet Palio Stile will be unveiled beginning March 2008, the Fiat500 will come in May 2008, followed by the Bravo in June, the Linea and the Grande Punto in September and December 2008 respectively. Considering a mighty 128% import duty on the vehicles, the company intends to price its new offerings between Rs.1.1 to Rs.2 million. As per market reports, Fiat India will also sell these cars like boutique products rather than normal cars as the spokesperson further adds, “These are premium cars and are for the people in the high end of life. They will be more of collector’s item, celebrity cars.”

Clearly, Fiat India is not ready to let go of a high potential market like India where auto sales are appreciating y-o-y at an incredible 18%. The company’s premium segment entry and the resultant rebranding strategy is sure to get the desired results but a word of caution here: Fiat India should guard against its tendency to take the after sales scenario lightly. Apparently Fiat India is ready to nip the problem at its roots, but it’s still too early to say Bravo!
 
 
B&E edit bureau: Karan Mehrishi