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Fiat dumps Tata Motors' dealers

Admin24.09.2012г 

As it goes for a brand-revival in India, struggling carmaker Fiat has decided to lay off many of the dealers of erstwhile sales and distribution partner Tata Motors, while setting up new solo outlets.

Company sources told TOI that Fiat has stipulated a series of checks while deciding on its own sales and service partners. "Many Tata Motors dealers, who were selling Fiat-branded cars previously, have not managed to qualify in this process," the sources said.

Ravi G Bhatia, VP (Commercial) for Fiat India Automobiles Ltd (Fial), however, refused to confirm the development. "We are still working on concrete details. All I can say is that there is no obligation for us to retain the existing Tata Motors dealers (selling Fiat cars) even though we will continue to have a preference for them," Bhatia said, adding, "If for some reason an existing Tata-Fiat dealer does not meet the criteria we have set, then we will certainly not hesitate to change him." An e-mail questionnaire sent to Tata Motors on the matter remained unanswered.

Fiat has been struggling in India over the last few years and despite having mainline products like the Linea sedan and the Punto hatchback, it has not been able to gain respectable volumes. The company sold a paltry 16,073 units in 2011-12 and its sales dipped 24%, even as the overall passenger vehicle market touched 26.2 lakh units at a growth of 5%. The performance has been even more dismal in the first five months of this fiscal (April-August) as Fiat's India sales have slipped 48% on total volumes of 4,061 units, according to numbers provided by industry body Society of Indian Automobile Manufacturers (Siam).

Bhatia said there are a variety of parameters that help Fiat decide on a new retail partner. "We have a meeting with each candidate that applies for a dealership. The factors we look at include a location review, service and customer orientation review, financial strength and overall automobile experience." Fiat has formed a committee on the matter that vets the various proposals, he added.

The company, which still has a joint venture with Tata Motors to manufacture cars and engines at a common plant at Ranjangaon in Maharashtra, had ended its distribution pact with the Indian partner in May this year.

Fiat vehicles are currently sold from 174 Tata-Fiat branded showrooms across 126 cities. But the Italian car major will move to independent stores and will have 80 dealerships in 67 cities by March next year. "The rest of the cities will also be covered by December next year," Bhatia said. Fiat India will also reinfore its workforce. "We will be hiring 100 more people, mainly in customer-facing roles."

Bhatia agreed that Fiat faces an uphill task as it goes in for a revival of the brand. "We have to re-build the confidence of customers in the Fiat brand. We need to reassure customers who today are nervous over the sales and performance of our products. However, this cannot happen overnight." Managements of both Fiat and Tata Motors have admitted previously that more needs to be done to revive the brand in India.