re: Fiat's India strategy revealed This is my eighth year of owning a FIAT car and the eighth year of analysing why it is a failure. Sometimes, I wonder how this manufacturer is still around, but when I compare my spare parts bills to a Maruti owner's, I realise why.
I have a few thoughts on this. With a lakh-and-a-half kilometers under my belt and having paid Rs 15,00,000/- to Fiat one way or the other in the last eighth, I think:
1. Is having volumes everything? Assuming FIAT has 1% market share which it manages to improve to 3-4%. Is it not possible to sustain at that 3% as long as it is a steady 3%. Is there a market study or a conclusive study that says that a car manufacturer that sells less than 3% of the total market share WILL definitely go bankrupt? I have been seeing "FIAT should leave the Indian market comments since 2008". Nobody has left (Thank God for owners like me, though!).
2. Low volumes affect everything. I understand. But can a consistent low volume help a company survive? High volumes means high profitability but also higher risks, higher installed capacity which is difficult to maintain in case of a slowdown.
3. For all its troubles, FIAT needs to work on its weak areas first. Number one being reliability and parts quality. Second being network. Third being sales. It is the first two that come first.
4. Many Fiat owners are looking for their second / third cars. Even a retention customer means a sale. For that they need to do two things: convince existing customer that new cars are better than the old ones in quality and also provide at least one level of upgrade (say a Bravo for a Linea / Petra customer). After driving a 75 HP MJD (which had to be overhauled at 1.45 lakh km!) I don't know if I would like to drive another turbo-lag filled 90 HP MJD from Fiat for another ten years. The reliability argument also comes here. As I grow older I don't want to spend every other Sunday at the A.S.C. with my car. Every Fiat owner also needs to earn his livelihood and has to have a work / life balance. Enter the last argument...
5. When will we get an A.S.C. that is at least at par with Maruti? Why can't they diagnose and fix things thoroughly in one go? I have had three repeat visits for an engine overhaul and other works which cost me Rs 1.45 lakhs! A customer whose car has stood in the A.S.C. for 16 days and has that sort of a bill, expects that the work done does not require repeat visits. And no, the problem is STILL not solved, though it is something very minor. And this is arguably the best Fiat A.S.C. in North India. And no, customer service follow-up doesn't help as it means I have to give the car back in for another day. I would rather DIY because its a very minor issue. But do you feel like doing a DIY after paying 1.5 lakhs?
If you don't retain the existing customers, you don't get new ones. If you retain the existing customers loyally, you multiply your sales at least 1.5 times. |