Fiat Chrysler Automobiles (FCA) did not produce any vehicle under the Fiat brand from its Pune-based plant in February raising speculations the company plans to exit India amid sustained poor performance.
According to data from the Society of Indian Automobile Manufacturers (SIAM), FCA India produced zero Fiat-branded cars from the Ranjangaon, Maharashtra plant in February. However, the plant continues to make the Compass SUV under the Jeep brand, owned by FCA India.
Though there is no official comment from FCA India about the future of the Fiat brand, dealers have started to dole out unusually heavy discounts on Fiat cars in order to get rid of the inventory.
Company sales to dealers in December, January and February did not match with the production pattern in February. During these three months, Fiat-branded vehicles saw a 17 percent growth with dispatches in February alone growing 38 percent, as per SIAM data.
This should have ideally led to a spike in production during February as channel inventory was cleared to a significant extent. But contrary to this, production was brought down in February, thus fueling the possibility of Fiat brand’s gradual exit from the country.
Sources said Fiat’s management is concerned about the fate of the more than 80 operational dealerships, many of whom sell both Fiat and Jeep models. Fiat’s potential exit will closely follow that by General Motors, that was dragged to the courts by dealerships for the closure of operations.
FCA India was not available for comment at the time of publishing this article.
Sales of Fiat-branded vehicles in India recorded a 60 percent drop during April-February to 718 units as compared to the same period last year. To put this into perspective, Mercedes-Benz, India’s largest luxury car maker, clocks nearly 1,300 units sales a month.
FCA India has decided against investing in upgradation of its existing five-model portfolio to meet the upcoming safety and emission norms. The Mumbai-based company sells hatchbacks and a sedan in the price band of Rs 5.35 lakh to Rs 9.67 lakh under the brands Punto Evo, Abarth Punto, Urban Cross, Avventura and Linea.
Fiat does not offer airbags as standard in each of the variants on all the models. As per government’s order, all cars produced from April 1, 2019, onward will have to offer at least the driver-side airbag along with other safety features such as antilock braking system, reverse sensors and seat belt reminder.
Companies are also investing in upgrading to Bharat Stage-VI emission norms from the current BS-IV norms. This new norm will kick in from April 1, 2020. Almost all companies have pruned their portfolio in view of the regulatory changes.
FCA Group has decided to keep Jeep (from the Chrysler portfolio) as the relevant brand for India given its greater acceptance despite its premium pricing. FCA is investing in at least two models for the Jeep brand that will debut by 2023 in India, as per company officials. Jeep sells four models in India, Compass, Wrangler, Grand Cherokee and Grand Cherokee SRT.