Fiat India posts jump in revenues after breakup with Tata Motors
Breakups are definitely not considered as something good. However, this might not be true where business associations in the automotive world are concerned. At least, such a breakup has not at all proven to be bad in the case of Fiat India. In fact, Fiat India has posted good results after its split from the Indian auto major Tata Motors.
Italian car maker Fiat had been in a business association with the homegrown car major Tata Motors, but their partnership fell apart a year ago, and the partnership conclusion has proven to be very fruitful for Fiat India. The Italian company has posted vigorous growth in its sales as well as profits on a year on year basis and has reported a massive increase in revenues, amounting to 88 percent at Rs. 3863 crores in the current financial year. This has also been the first year of Fiat India’s full scale operations since the car maker first began its operation in India entirely on its own.
Later on Fiat India had joined hands with Tata Motors and had been selling its range of products through the Tata Motors dealership outlets across the country. Nevertheless, this partnership with Tata Motors did not actually work in favour of the Italian car major, as the Fiat car models were being mostly neglected and were getting relegated to the background. Moreover, the spare parts availability as well as after sales servicing for the Fiat cars also became an issue. As the Fiat cars were shoved under the curtains, the Italian car maker witnessed sales decline from 22,587 vehicles back in 2009 to a drastic 8801 vehicle in the 2013. Finally, Fiat decided to take charge of its operations in India and improve its presence in the domestic market.
This resulted in the split of Fiat India with Tata Motors in March last year, after which Fiat started selling its cars from its own dealership outlets in the country. From April 2013, Fiat India has set-up its own exclusive 108 dealership outlets across India and it aims at bringing that number to a total of 150 outlets by the end of the current calendar year.
Fiat India has managed to sell 11,980 vehicles in the financial year of 2014, resulting in a massive 87 percent increase as compared against the same period during the last year. Fiat India is definitely working on a full scale enhancement of its presence in the country and apart from expanding its dealership network; it is also working to improve the marketing and distribution channels. Fiat has also set up pan India Fiat Caffe’s.
Like all car makers in India, Fiat is also working on expanding its product range. At present, the company offers only 4 products in India, namely the Linea Classic sedan, New Linea sedan, new Punto Evo hatchback and the recently launched Avventura crossover. Fiat India is currently busy preparing for the launch of the Abarth 500 premium hatchback that will take place in the next few weeks’ time.
Source – Financial Express