A REPORT

ON

Strategic Outlook for Fiat India Automobiles Ltd

By

Abhishek Bhardwaj

0901200065

ICFAI Business School

A REPORT

ON

Strategic Outlook for Fiat India Automobiles Ltd

By

Abhishek Bhardwaj

0901200065

A report submitted in partial fulfillment of

the requirements of

MBA program of

the ICFAI University Dehradun

Date of Submission 7th March 2011

SUBMITTED TO

Prof Ashwini Sovani

IBS Pune

Acknowledgment

Through this acknowledgement I express my sincere gratitude towards all those people

who have helped me in the preparation of this project which has been a learning

experience

I am highly obliged to Prof Dhananjay Keskar (Director IBS Pune) for providing me

an opportunity to study in this esteemed institute and go through the rigorous MBA

program of 2 years I am highly indebted to him for the all guidance and support

I wish to thank my Faculty Guide- Prof Ashwini Sovani (Faculty IBS PUNE) for her

continuous support and time He has been a guiding spirit all throughout this project and

has given all the information which made it possible for me to make this project I

express my sincere thanks to him who guided me throughout the project and gave me

valuable suggestions and encouragement for my continuous improvement

Finally I owe my special thanks to my family amp friends who are my source of

encouragement and inspiration and without their help and support this project would

not have shaped up so beautifully I wish to thank them for the entire morale boost that

they gave in times of need

Table of Contents

I Abstract

II Introduction

III Report

IV References

AbstractThe report explores reasons for the poor performance of the Italian automobile company Fiat in India It examines in detail the companys efforts to make its Uno Sienna Palio Grande Punto and Linea cars a success The report also takes a look at the changes made by the company for ensuring the success of its car the Palio launched in September 2001 The report is so structured as to enable one to understand how certain mistakes on the marketing product development and the strategic alliance fronts resulted in Fiats poor performance over the years in the Indian car market One should be able to understand the rationale behind the measures taken by the company for ensuring the success of its various cars

Credited as one of the founders of the European automobile industry Fabbrica Italiana Automobili Torino (FIAT) SpA was established in 1899 in Turin Italy by a group of individual investors FIATs automobiles achieved instant popularity not only in Italy but also internationally

Over the next century FIAT consistently followed a two-pronged growth strategy penetration of foreign markets and focus on innovation The innovation strategy fuelled the companys diversification plans into agricultural and construction equipment commercial vehicles metallurgical products components production systems aviation publishing and communications and insurance

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Four versions of the Palio were launched in September 2001 the prices ranged from Rs 0349 million to Rs 0499 million Analysts remarked that these models were priced competitively against the Santro and the Zen

The entry-level models of the Palio (EL) and the Santro cost Rs 0349 million and Rs 0334 million respectively Fiat claimed that it offered a net Rs 26000 worth of content more than the Santro The market seemed to agree with Fiat as the car was received rather well In just two days over 1100 cars were sold This prompted Fiat to increase the daily production at its Kurla plant in October 2001 Bianchi said While daily production at the Kurla plant has already been increased from 50 to 70 cars a day we plan to increase it further to 100 cars a day by mid-October and 150 by November-December The company was also planning to add a third shift and produce 220 cars a day

IntroductionldquoWe will show what Fiat means in terms of technology service deliver cost finance mobility solution to the customerrdquo

- Maurizio Paolo Bianchi Managing Director (Fiat India) in October 2001

The Launch of Palio

History

The history of Fiat began many years ago at the dawn of Italian industrialization

Giovanni Agnelli founded Fiat in 1899 with several investors

Its first car the 3 frac12 CV strongly resembled contemporary Benz and had a 697 cc boxer twin engine

In 1910 Fiat was the largest automotive company in Italy

By the early 1920s Fiat had a market share in Italy of 80

In 1922 Fiat began to build the famous Lingotto car factory the largest in Europe up to that time which opened in 1923

In India the company was established in 1905 as Bombay Motor Cars Agency as its sales agent

Fiat Automobiles signed a licence and servicing contract with Premier Automobiles Ltd to manufacturing and selling of 1100 and 1100D Fiat Padmini cars

Fiat has achieved a high level of localisation for all its cars and is making world-class cars available in India at even more competitive and affordable prices

Fiat Automobiles owns the most-admired and sought-after models worldwide including the Fiat Lancia the Ferrari the Maserati and the Alfa Romeo

Fiat is the only automobile manufacturer in the world that has won the coveted European Car of the Year award nine times It is also the only company in the world that manufacturerrsquos recyclable car

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

A REPORT

ON

Strategic Outlook for Fiat India Automobiles Ltd

By

Abhishek Bhardwaj

0901200065

A report submitted in partial fulfillment of

the requirements of

MBA program of

the ICFAI University Dehradun

Date of Submission 7th March 2011

SUBMITTED TO

Prof Ashwini Sovani

IBS Pune

Acknowledgment

Through this acknowledgement I express my sincere gratitude towards all those people

who have helped me in the preparation of this project which has been a learning

experience

I am highly obliged to Prof Dhananjay Keskar (Director IBS Pune) for providing me

an opportunity to study in this esteemed institute and go through the rigorous MBA

program of 2 years I am highly indebted to him for the all guidance and support

I wish to thank my Faculty Guide- Prof Ashwini Sovani (Faculty IBS PUNE) for her

continuous support and time He has been a guiding spirit all throughout this project and

has given all the information which made it possible for me to make this project I

express my sincere thanks to him who guided me throughout the project and gave me

valuable suggestions and encouragement for my continuous improvement

Finally I owe my special thanks to my family amp friends who are my source of

encouragement and inspiration and without their help and support this project would

not have shaped up so beautifully I wish to thank them for the entire morale boost that

they gave in times of need

Table of Contents

I Abstract

II Introduction

III Report

IV References

AbstractThe report explores reasons for the poor performance of the Italian automobile company Fiat in India It examines in detail the companys efforts to make its Uno Sienna Palio Grande Punto and Linea cars a success The report also takes a look at the changes made by the company for ensuring the success of its car the Palio launched in September 2001 The report is so structured as to enable one to understand how certain mistakes on the marketing product development and the strategic alliance fronts resulted in Fiats poor performance over the years in the Indian car market One should be able to understand the rationale behind the measures taken by the company for ensuring the success of its various cars

Credited as one of the founders of the European automobile industry Fabbrica Italiana Automobili Torino (FIAT) SpA was established in 1899 in Turin Italy by a group of individual investors FIATs automobiles achieved instant popularity not only in Italy but also internationally

Over the next century FIAT consistently followed a two-pronged growth strategy penetration of foreign markets and focus on innovation The innovation strategy fuelled the companys diversification plans into agricultural and construction equipment commercial vehicles metallurgical products components production systems aviation publishing and communications and insurance

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Four versions of the Palio were launched in September 2001 the prices ranged from Rs 0349 million to Rs 0499 million Analysts remarked that these models were priced competitively against the Santro and the Zen

The entry-level models of the Palio (EL) and the Santro cost Rs 0349 million and Rs 0334 million respectively Fiat claimed that it offered a net Rs 26000 worth of content more than the Santro The market seemed to agree with Fiat as the car was received rather well In just two days over 1100 cars were sold This prompted Fiat to increase the daily production at its Kurla plant in October 2001 Bianchi said While daily production at the Kurla plant has already been increased from 50 to 70 cars a day we plan to increase it further to 100 cars a day by mid-October and 150 by November-December The company was also planning to add a third shift and produce 220 cars a day

IntroductionldquoWe will show what Fiat means in terms of technology service deliver cost finance mobility solution to the customerrdquo

- Maurizio Paolo Bianchi Managing Director (Fiat India) in October 2001

The Launch of Palio

History

The history of Fiat began many years ago at the dawn of Italian industrialization

Giovanni Agnelli founded Fiat in 1899 with several investors

Its first car the 3 frac12 CV strongly resembled contemporary Benz and had a 697 cc boxer twin engine

In 1910 Fiat was the largest automotive company in Italy

By the early 1920s Fiat had a market share in Italy of 80

In 1922 Fiat began to build the famous Lingotto car factory the largest in Europe up to that time which opened in 1923

In India the company was established in 1905 as Bombay Motor Cars Agency as its sales agent

Fiat Automobiles signed a licence and servicing contract with Premier Automobiles Ltd to manufacturing and selling of 1100 and 1100D Fiat Padmini cars

Fiat has achieved a high level of localisation for all its cars and is making world-class cars available in India at even more competitive and affordable prices

Fiat Automobiles owns the most-admired and sought-after models worldwide including the Fiat Lancia the Ferrari the Maserati and the Alfa Romeo

Fiat is the only automobile manufacturer in the world that has won the coveted European Car of the Year award nine times It is also the only company in the world that manufacturerrsquos recyclable car

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Acknowledgment

Through this acknowledgement I express my sincere gratitude towards all those people

who have helped me in the preparation of this project which has been a learning

experience

I am highly obliged to Prof Dhananjay Keskar (Director IBS Pune) for providing me

an opportunity to study in this esteemed institute and go through the rigorous MBA

program of 2 years I am highly indebted to him for the all guidance and support

I wish to thank my Faculty Guide- Prof Ashwini Sovani (Faculty IBS PUNE) for her

continuous support and time He has been a guiding spirit all throughout this project and

has given all the information which made it possible for me to make this project I

express my sincere thanks to him who guided me throughout the project and gave me

valuable suggestions and encouragement for my continuous improvement

Finally I owe my special thanks to my family amp friends who are my source of

encouragement and inspiration and without their help and support this project would

not have shaped up so beautifully I wish to thank them for the entire morale boost that

they gave in times of need

Table of Contents

I Abstract

II Introduction

III Report

IV References

AbstractThe report explores reasons for the poor performance of the Italian automobile company Fiat in India It examines in detail the companys efforts to make its Uno Sienna Palio Grande Punto and Linea cars a success The report also takes a look at the changes made by the company for ensuring the success of its car the Palio launched in September 2001 The report is so structured as to enable one to understand how certain mistakes on the marketing product development and the strategic alliance fronts resulted in Fiats poor performance over the years in the Indian car market One should be able to understand the rationale behind the measures taken by the company for ensuring the success of its various cars

Credited as one of the founders of the European automobile industry Fabbrica Italiana Automobili Torino (FIAT) SpA was established in 1899 in Turin Italy by a group of individual investors FIATs automobiles achieved instant popularity not only in Italy but also internationally

Over the next century FIAT consistently followed a two-pronged growth strategy penetration of foreign markets and focus on innovation The innovation strategy fuelled the companys diversification plans into agricultural and construction equipment commercial vehicles metallurgical products components production systems aviation publishing and communications and insurance

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Four versions of the Palio were launched in September 2001 the prices ranged from Rs 0349 million to Rs 0499 million Analysts remarked that these models were priced competitively against the Santro and the Zen

The entry-level models of the Palio (EL) and the Santro cost Rs 0349 million and Rs 0334 million respectively Fiat claimed that it offered a net Rs 26000 worth of content more than the Santro The market seemed to agree with Fiat as the car was received rather well In just two days over 1100 cars were sold This prompted Fiat to increase the daily production at its Kurla plant in October 2001 Bianchi said While daily production at the Kurla plant has already been increased from 50 to 70 cars a day we plan to increase it further to 100 cars a day by mid-October and 150 by November-December The company was also planning to add a third shift and produce 220 cars a day

IntroductionldquoWe will show what Fiat means in terms of technology service deliver cost finance mobility solution to the customerrdquo

- Maurizio Paolo Bianchi Managing Director (Fiat India) in October 2001

The Launch of Palio

History

The history of Fiat began many years ago at the dawn of Italian industrialization

Giovanni Agnelli founded Fiat in 1899 with several investors

Its first car the 3 frac12 CV strongly resembled contemporary Benz and had a 697 cc boxer twin engine

In 1910 Fiat was the largest automotive company in Italy

By the early 1920s Fiat had a market share in Italy of 80

In 1922 Fiat began to build the famous Lingotto car factory the largest in Europe up to that time which opened in 1923

In India the company was established in 1905 as Bombay Motor Cars Agency as its sales agent

Fiat Automobiles signed a licence and servicing contract with Premier Automobiles Ltd to manufacturing and selling of 1100 and 1100D Fiat Padmini cars

Fiat has achieved a high level of localisation for all its cars and is making world-class cars available in India at even more competitive and affordable prices

Fiat Automobiles owns the most-admired and sought-after models worldwide including the Fiat Lancia the Ferrari the Maserati and the Alfa Romeo

Fiat is the only automobile manufacturer in the world that has won the coveted European Car of the Year award nine times It is also the only company in the world that manufacturerrsquos recyclable car

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Table of Contents

I Abstract

II Introduction

III Report

IV References

AbstractThe report explores reasons for the poor performance of the Italian automobile company Fiat in India It examines in detail the companys efforts to make its Uno Sienna Palio Grande Punto and Linea cars a success The report also takes a look at the changes made by the company for ensuring the success of its car the Palio launched in September 2001 The report is so structured as to enable one to understand how certain mistakes on the marketing product development and the strategic alliance fronts resulted in Fiats poor performance over the years in the Indian car market One should be able to understand the rationale behind the measures taken by the company for ensuring the success of its various cars

Credited as one of the founders of the European automobile industry Fabbrica Italiana Automobili Torino (FIAT) SpA was established in 1899 in Turin Italy by a group of individual investors FIATs automobiles achieved instant popularity not only in Italy but also internationally

Over the next century FIAT consistently followed a two-pronged growth strategy penetration of foreign markets and focus on innovation The innovation strategy fuelled the companys diversification plans into agricultural and construction equipment commercial vehicles metallurgical products components production systems aviation publishing and communications and insurance

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Four versions of the Palio were launched in September 2001 the prices ranged from Rs 0349 million to Rs 0499 million Analysts remarked that these models were priced competitively against the Santro and the Zen

The entry-level models of the Palio (EL) and the Santro cost Rs 0349 million and Rs 0334 million respectively Fiat claimed that it offered a net Rs 26000 worth of content more than the Santro The market seemed to agree with Fiat as the car was received rather well In just two days over 1100 cars were sold This prompted Fiat to increase the daily production at its Kurla plant in October 2001 Bianchi said While daily production at the Kurla plant has already been increased from 50 to 70 cars a day we plan to increase it further to 100 cars a day by mid-October and 150 by November-December The company was also planning to add a third shift and produce 220 cars a day

IntroductionldquoWe will show what Fiat means in terms of technology service deliver cost finance mobility solution to the customerrdquo

- Maurizio Paolo Bianchi Managing Director (Fiat India) in October 2001

The Launch of Palio

History

The history of Fiat began many years ago at the dawn of Italian industrialization

Giovanni Agnelli founded Fiat in 1899 with several investors

Its first car the 3 frac12 CV strongly resembled contemporary Benz and had a 697 cc boxer twin engine

In 1910 Fiat was the largest automotive company in Italy

By the early 1920s Fiat had a market share in Italy of 80

In 1922 Fiat began to build the famous Lingotto car factory the largest in Europe up to that time which opened in 1923

In India the company was established in 1905 as Bombay Motor Cars Agency as its sales agent

Fiat Automobiles signed a licence and servicing contract with Premier Automobiles Ltd to manufacturing and selling of 1100 and 1100D Fiat Padmini cars

Fiat has achieved a high level of localisation for all its cars and is making world-class cars available in India at even more competitive and affordable prices

Fiat Automobiles owns the most-admired and sought-after models worldwide including the Fiat Lancia the Ferrari the Maserati and the Alfa Romeo

Fiat is the only automobile manufacturer in the world that has won the coveted European Car of the Year award nine times It is also the only company in the world that manufacturerrsquos recyclable car

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

AbstractThe report explores reasons for the poor performance of the Italian automobile company Fiat in India It examines in detail the companys efforts to make its Uno Sienna Palio Grande Punto and Linea cars a success The report also takes a look at the changes made by the company for ensuring the success of its car the Palio launched in September 2001 The report is so structured as to enable one to understand how certain mistakes on the marketing product development and the strategic alliance fronts resulted in Fiats poor performance over the years in the Indian car market One should be able to understand the rationale behind the measures taken by the company for ensuring the success of its various cars

Credited as one of the founders of the European automobile industry Fabbrica Italiana Automobili Torino (FIAT) SpA was established in 1899 in Turin Italy by a group of individual investors FIATs automobiles achieved instant popularity not only in Italy but also internationally

Over the next century FIAT consistently followed a two-pronged growth strategy penetration of foreign markets and focus on innovation The innovation strategy fuelled the companys diversification plans into agricultural and construction equipment commercial vehicles metallurgical products components production systems aviation publishing and communications and insurance

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Four versions of the Palio were launched in September 2001 the prices ranged from Rs 0349 million to Rs 0499 million Analysts remarked that these models were priced competitively against the Santro and the Zen

The entry-level models of the Palio (EL) and the Santro cost Rs 0349 million and Rs 0334 million respectively Fiat claimed that it offered a net Rs 26000 worth of content more than the Santro The market seemed to agree with Fiat as the car was received rather well In just two days over 1100 cars were sold This prompted Fiat to increase the daily production at its Kurla plant in October 2001 Bianchi said While daily production at the Kurla plant has already been increased from 50 to 70 cars a day we plan to increase it further to 100 cars a day by mid-October and 150 by November-December The company was also planning to add a third shift and produce 220 cars a day

IntroductionldquoWe will show what Fiat means in terms of technology service deliver cost finance mobility solution to the customerrdquo

- Maurizio Paolo Bianchi Managing Director (Fiat India) in October 2001

The Launch of Palio

History

The history of Fiat began many years ago at the dawn of Italian industrialization

Giovanni Agnelli founded Fiat in 1899 with several investors

Its first car the 3 frac12 CV strongly resembled contemporary Benz and had a 697 cc boxer twin engine

In 1910 Fiat was the largest automotive company in Italy

By the early 1920s Fiat had a market share in Italy of 80

In 1922 Fiat began to build the famous Lingotto car factory the largest in Europe up to that time which opened in 1923

In India the company was established in 1905 as Bombay Motor Cars Agency as its sales agent

Fiat Automobiles signed a licence and servicing contract with Premier Automobiles Ltd to manufacturing and selling of 1100 and 1100D Fiat Padmini cars

Fiat has achieved a high level of localisation for all its cars and is making world-class cars available in India at even more competitive and affordable prices

Fiat Automobiles owns the most-admired and sought-after models worldwide including the Fiat Lancia the Ferrari the Maserati and the Alfa Romeo

Fiat is the only automobile manufacturer in the world that has won the coveted European Car of the Year award nine times It is also the only company in the world that manufacturerrsquos recyclable car

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

IntroductionldquoWe will show what Fiat means in terms of technology service deliver cost finance mobility solution to the customerrdquo

- Maurizio Paolo Bianchi Managing Director (Fiat India) in October 2001

The Launch of Palio

History

The history of Fiat began many years ago at the dawn of Italian industrialization

Giovanni Agnelli founded Fiat in 1899 with several investors

Its first car the 3 frac12 CV strongly resembled contemporary Benz and had a 697 cc boxer twin engine

In 1910 Fiat was the largest automotive company in Italy

By the early 1920s Fiat had a market share in Italy of 80

In 1922 Fiat began to build the famous Lingotto car factory the largest in Europe up to that time which opened in 1923

In India the company was established in 1905 as Bombay Motor Cars Agency as its sales agent

Fiat Automobiles signed a licence and servicing contract with Premier Automobiles Ltd to manufacturing and selling of 1100 and 1100D Fiat Padmini cars

Fiat has achieved a high level of localisation for all its cars and is making world-class cars available in India at even more competitive and affordable prices

Fiat Automobiles owns the most-admired and sought-after models worldwide including the Fiat Lancia the Ferrari the Maserati and the Alfa Romeo

Fiat is the only automobile manufacturer in the world that has won the coveted European Car of the Year award nine times It is also the only company in the world that manufacturerrsquos recyclable car

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Report

Fiat India has been mulling over to adopt a new marketing strategy for the Indian market Despite having some highly competitive cars in its India portfolio the sales figures of the company remain moderate Fiat Punto The company currently sells two fairly competitive cars in India including hatchback Fiat Punto and sedan Fiat Linea but has managed to sell mere 24806 units in the financial year 2009-10 which is a very small number considering the total industry sales of 15 million units during the same period

As per the industry experts the performance of Fiat India during the last one year could have been better if it would have focused more on the sales and promotions of its under deserving cars like Fiat Punto and Linea in the Indian market According to Mr Rajeev Kapoor MD of Fiats India that the sales of Fiat India could have been better considering it has two competitive products (Linea and Punto) both of which are available in petrol and diesel engine options He further reiterated that the numbers could have been better

The company currently sells its cars in India through 175 Tata Motors dealerships which is a 5050 joint venture partner of Fiat in India Where the company had reported a robust growth of 208 percent in the Indian market in FY 09-10 its market share is still mere 16 percent in the country However the company is continuously working on reaching more and more customers in India by enhancing its dealership base and increasing its manufacturing facility in the country

The new marketing strategy of the company includes creation of separate sales teams dedicated to its different car to make sure that a single model can be pin-pointed and sales can be improved This would indeed be a trendsetter in the Indian automobile industry

From the very beginning the strategy of Fiat Powertrain Technologies has been to unify the innovation capabilities and technological expertise before spread among Fiat Auto Iveco Centro Ricerche Fiat and Elasis Through that strategy FPT is capitalizing on the technological excellence of Fiat engines and transmissions to approach the open market gaining and increasing shares through noncaptive customers

Of course the base business and the starting point is captive as Iveco Case New Holland (CNH) and Fiat Auto are presently the major customers however this captive knowledge can help us to successfully approach and manage new customers

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

The open market business is implemented on two parallel channels One is retail based mainly on sales through the companys network of distributors and dealers Established by Iveco-Aifo and Iveco Motors this retail channel is able to sell tailored engines to small OEMs The second path to market is through the KA channels structured to serve global OEMs directly with an internal sales force operating in the automotive industrial and power generation market segments

FPTs strategy of doubling its volumes by 2010 has been approached by Sales amp Marketing by focusing its effort on the open market prioritizing areas that will give the company a global presence where it will structure the FPT presence by replicating the central structure

On the KA side one of the first large contracts of strategic value for the new organization has been the DaimlerFPT agreement for the supply of 78000 engines per year for the Canter light commercial vehicle of Mitsubishi Fuso This deal has been followed synergistically by Sales amp Marketing application engineering and manufacturing demonstrating how FPT can work as one company thereby giving its global players multifunctional support to cover all their different needs

As mentioned the FPT approach is not restricted to a limited number of large customers but with its network tries to gather a portfolio of medium-sized OEMs evenly distributed in the various areas of the world

In Europe the Fiat Group is traditionally present and our strategy now is to consolidate and extend the former Iveco Motors network growing the penetration especially in the Eastern European countries A special effort is also made in the Mediterranean coastal area where the current network of local shops will be improved to provide an even better assistance to FPT marinized engines that are powering both pleasure hulls an professional fishing boats

North America is another marketplace of strategic interest given both its size and the number and importance of its OEMs FPT North America has already established a network of local dealers and a decentralized RampD and Engineering Center is going to open in Burr Ridge near Chicago to assist local OEMs CNH one of the largest OEMs belonging to the Fiat Group is considered the starting point to develop this approach

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

In Latin America the situation is different as the Fiat Group also has a large footprint in Betim near Belo Horizonte that enables the group to be a market leader in the automotive sector FPT is benefitting from this industrial footprint to produce industrial diesel engines of the Nef and of Cursor families while gearboxes and axles are produced in Cordoba The main challenge in these countries protected by high import duties is to produce engines with high local content in order to satisfy OEM needs through local production

China India and the Far East are the fastest developing countries in the world and FPT decided to be present there through a joint venture with Tata the market leader in the Indian manufacturer for India That led FPT to produce industrial engines in Pune for both Tata and also to serve Indian OEMs producing agricultural and construction machinery as well as generating sets

A similar deal was concluded in November 2006 with Iveco SAIC and Chongching for the construction of an engine manufacturing plant in the Chongching industrial area This plant is sized for the production of 100000 engines per year to be distributed through three different channels These include the two Fiat Group companies already well established in China Iveco and CNH a growing group of Chinese OEMs of off-highway machines that are distributed in the domestic Chinese markets and for export to the rest of the Far East and Australia which are served through the Shanghai hub

Finally in Russia a similar deal is in the advanced planning stage with a local player The engine production pole will serve the growing group of Russian OEMs mainly dedicated to develop mobile equipment for the internal Russian marketplace At the time of writing the joint venture is not signed but the agreement should be concluded within the first half of 2008

The Launch of PalioIn September 2001 Fiat India Automobiles Limited (Fiat) held a lavish function in the Indian coastal state of Goa The function featuring performances by leading Indian musicians Louis Banks and Sivamani who had composed music especially for this event was held to celebrate the launch of Fiats much-awaited car the Palio Designed by well-known Italian automobile designer Giorgetto Giugiaro1 the Palio was already a huge success in countries like Brazil and Argentina

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

The media termed the high-profile launch of Palio backed by a Rs 120 million endorsement deal with leading Indian cricket player Sachin Tendulkar (Tendulkar) as a desperate attempt by the Italian automobile giant to establish itself as a serious contender in the Indian car market The Palio was expected to boost the companys sales which had been declining for the past few years Known as the Fiat Groups world car the Palio was being seen as Fiats last chance to tackle its accumulated losses of Rs 10 billion2 Fiat did appear to be taking a last chance with this new car It had dedicated more than 83 of its total installed capacity for the production of the Palio The company had invested an additional $ 250 million at its Kurla Maharashtra plant for the new car

Unlike some of the other small cars that had been adapted to suit tough driving conditions in India the Palio had been designed from scratch with these conditions in mind Fiat had even decided to reduce the combined production of its other models - Uno Siena and Siena Weekend - to 10000 per year Instead the company planned to build 50000 Palios during the first year of its launch

It was reported that the company was ready to stop producing the Uno completely if necessary Company sources revealed The decision regarding whether the Uno should be continued will be taken after the Palio is launched and after observing the performance of the former car Fiat had also postponed the launch of the Multipla (part van part car) for the time being Fiat Indias Managing Director Maurizio Bianchi was extremely optimistic regarding Palios prospects With the Palio we plan to give the widest range possible in the B-segment3 We will launch with the 12 and 16-liter petrol (versions) and by 2003 offer a 19 diesel (version) We will also try to give a wide range of options to suit every pocket and taste In this way we will be able to span the complete spectrum of the B-segment which today accounts for 40 of the Indian market

Although Bianchi was optimistic his skeptics far outnumbered his supporters The reasons were not difficult to understand as the companys five decade long existence in the Indian automobile market had only produced failures In spite of having invested over Rs 301 billion since 1996 in the country Fiats market share in 2001 was only 13

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

The Failed Resuscitation AttemptsUNO

In March 1996 Fiat signed an agreement with PAL to import and assemble CKD kits of the 999-cc car Uno Uno launched by FIAT in 1983 was the most successful car in the companys history

Uno was launched in 1996 amidst much fanfare and acquired around 300000 bookings in just three months However in June 1996 just when the company had closed the bookings the employee union at the Kurla plant forced a lockout The lockout was the result of a go-slow agitation led by militant trade union leader late Datta Samant started in April 1996 The lockout was lifted in November 1996 after a majority of the workforce defied the Datta Samant-led union and opted to go back to work As a result of the lockout production suffered greatly and the company could not deliver the booked vehicles in time - only 617 cars were delivered by the end of 1996 The non-delivery of the vehicles upset many consumers and around three-fourths of the orders were cancelled

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

This is the beginning of what promises to be a far-reaching long-term relationship between Fiat and Tata

- Ratan Tata Chairman Tata Motors in 2006

While Tata Motors will get technology to develop economically priced small cars and entry-level sedans and an entry into untapped markets Fiat India can continue to have a presence in the Indian market without much investment

- Kalpesh Parekh Auto analyst ASK Raymond James3 in 2006

In July 2006 major Italian automaker Fiat Auto SpA (Fiat Auto) and the Indian auto major Tata Motors (TM) signed a Memorandum of Understanding (MoU) to form a joint venture to produce passenger cars engines and transmissions in India These products were intended both for the Indian and the international market Earlier in January 2006 the two companies had signed a marketing and distribution agreement under which TM marketed select models of Fiat cars through a few of its dealers The joint venture was seen as a major development in the Indian automobile industry Both TM and Fiat Auto had a long history in automobile manufacturing Until the 1990s TM was mostly a manufacturer of commercial vehicles

It entered the passenger car market in the 1990s with the Indica a 1400 cc small car44 with a diesel engine which went on to become a success and placed TM among the top three passenger vehicle manufacturers in India However in 2002 because of a fall in the demand for commercial vehicles TM reported a loss As a part of its turnaround strategy it improved its internal efficiencies and also decided to focus on overseas markets to reduce the impact of demand fluctuations in the domestic market In 2003 TM returned to profitability By 2005 it had a market presence in Thailand Senegal South Africa Turkey Europe and West Asia

However in spite of its impressive growth TM was still a small player at the global level Fiat Auto which built its first car in 1899 also had an illustrious history in the automobile world After World War II it became a major manufacturer of small cars in Italy and later on in Europe Until the 1990s Fiat Auto dominated the small car market in Europe and other parts of the world5 In India Fiat cars were imported even as far back as 1905 In the 1950s the Fiat

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Group entered into a license agreement with India-based Premier Automobiles Ltd (PAL)6 to manufacture its cars Fiat Auto formally entered the Indian market in 1997 through a joint venture with PAL In the early 2000s Fiat Auto ran into losses as it was slow in adapting to the changed economic environment7 in Italy in particular and Europe in general

INITIAL IMPRESSION OF PADMINIFiat Padmini and Ambassador were the only cars available in India and the Indian consumers were really bored of those cars and wanted to be relieved of these cars That generation dint like the cars but still used it as there was no other option The first mistake that fiat made was in those times it had the first mover advantage in the Indian market but it did not capitalize on it in fact the brand image of fiat kept on deteriorating The consumers in India were totally fed up by fiat cars The impression that it created in those times was that of a high maintenance ugly cars this impression got carried to the next generation of users after 1991 when auto companies rushed through India and fiat became the un-preferred brand The impression it created in the early period carried on till a long period of time

GENEARATION AHEAD OF ITS TIMEThe fiat CEO himself once admitted that they have been ahead of their times in a statement made ldquowe were generations aheadrdquo They bet heavily on the success of Palio as a car which in fact was a success in the beginning but then couldnrsquot continue for a longer period of time After 3-4 years of the Paliorsquos launch cars like Swift and Getz in the same category were launched and have been successful

RUMORS OF CLOSURE DURING RELAUNCH

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

After Padminirsquos launch fiat didnrsquot launch any car for years together but then it introduced cars under the brand of Peugeot and also launched the UNO Peugeot faced a lot of problems in its initial years of launch Peugeot got thousands of pre launch bookings in those times but after the bookings were done a rumor spread that fiat is winding up its operations in India and peoplersquos money would be lost this created a panic

Company Overview

Fiat India Automobiles Private Limited (FIAPL) is a 50-50 Industrial Joint Venture between Fiat Group Automobiles and Tata Motors Limited originally incorporated on January 02 1997

Currently manufacturing the Palio Stile 11 and 16 models premium Fiat cars such as the Grande Punto and Linea are expected to boost sales soon in the B and C segment from the facility within

Also owns and controls five internationally renowned brands - Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles amp Ferrari

India being a major market for small cars Fiat Auto decided to revive its operations in the Indian market And the joint venture with TM was a step in that direction Most analysts were of the opinion that the joint venture would benefit both parties TM would gain in terms of better accessibility to technology design and global markets while for Fiat Auto it would mean a larger presence in India one of the worlds fastest growing auto markets without heavy investments However there were others who felt that the joint venture would end in brand dilution and product cannibalization for both parties Also with Honda Toyota GM Mitsubishi MampMRenault Nissan Skoda etc chalking out plans to enter the small car segment especially the premium small car segment it seemed likely that the TM-Fiat Auto joint venture would face intense competition in the coming years

Fabbrica Italiana Automobili TorinoGlobal Overview

1048707 FIAT SpA Turin based Large Industrial Group

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

1048707 Founded in 1899 by Giovanni Agnelli amp Group

1048707 Presence in 190 countries across the world

1048707 118 RampD Centers and 203 Plants World Wide

1048707 Refined its focus on the Cars

Fiat Automobiles India LimitedHistory

FIAL was originally incorporated on 2 January 1997 The company presently employs about 600 employees and is located at Ranjangaon in the PuneDistrict of Maharashtra The definitive agreement of the Joint Venture between Fiat and Tata was signed on 19 October 2007 The board of directors for this company comprises five nominees each from Fiat and Tata[1] Earlier Fiat use to sell the 1100 124 and Uno in India which was manufactured by Premier Automobiles Limited

Manufacturing Facilities

FIAL has a manufacturing plant at Ranjangaon Maharashtra which has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines in the next few years

Sales and Service Network

FIAL currently has 175 dealerships in 130 cities across India It uses the Tata Motors sales and service network which is third largest after Maruti Suzuki and Hyundai All Fiat cars in India are sold and serviced by Tata Motors

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Fiat India Automobiles Private Limited

Accelerating collaborative data management with Teamcenter

The Client Fiat India Automobiles Private Limited (FIAPL) now a 50-50 industrial joint venture between Fiat Group Automobiles SpA and Tata Motors Limited was originally incorporated as a company on January 2 1997 Fiat owns and controls five internationally renowned brands Fiat Automobiles Alfa Romeo Automobiles Lancia Automobiles Abarth and Fiat Light Commercial Vehicles Tata Motors Limited the other partner to the joint venture is Indiarsquos largest automobile company with revenues of 88 billion in 2007-08 It is the leader in commercial vehicles for compact midsize car and utility vehicle and among the top three in passenger vehicles Tata Motors is the worldrsquos fourth largest truck manufacturer and the worldrsquos second largest bus manufacturer The state-of-the-art Fiat facility at Ranjangaon India has an installed capacity to produce 100000 cars and 200000 engines besides aggregates and components The company plans to double the production capacity for both car units and engines within a few years of the new plantrsquos opening Fiat leverages the facilityrsquos vast resources to manufacture the Palio Stile 11 and

16 models as well as premium cars such as the Grande Punto and Linea

The Challenge Fiat India Automobiles Private Limited (FIAPL) was taking its production capabilities to the next level by building an enormous cutting-edge manufacturing facility in Ranjangaon India The massive plant was set to provide direct and indirect employment for more than 4000 people Apart from Fiat cars the facility was designed to produce Tata Motors passenger and next-generation cars with a total investment exceeding 650 million euros With the enormous complexity of the operations both at the Ranjangaon plant and other connected locations FIAPL needed a better way to collaborate and share data between its design

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

and manufacturing teams FIAPL used Teamcenter Automotive Edition (TcAE) as its primary data management and product lifecycle management (PLM) solution in the Ranjangaon plant The automaker determined that in order to overcome barriers to collaboration brought about by operating in disparate locations it needed to standardize and enhance TcAE usage at all production sites

The Solutions FIAPL called on Tata Technologies to align its TcAE solutions with its manufacturing objectives and to improve its staffrsquos TcAE usage methods for better collaboration After careful analysis of the design and manufacturing processes and technologies used by FIAPL Tata Technologies devised a solution to allow collaborative management of NX CAD files in Teamcenter Through multi-site Teamcenter configuration Tata Technologies extended this capability to FIAPLrsquos other locations for complete enterprise connectivity Tata Technologies provided FIAPL with a wide range of valuable services during the PLM project including bull Configuration of Teamcenter at multiple sites for seamless interaction with NX and Oracle platforms bull Installation of Teamcenter in the clientrsquos Windows systems bull Definition of a new query builder and importation of the Fiat query builder to enable searches by Fiat part number bull Implementation of business rules and maintenance bull Creation of revision rules according to Fiat methodology bull Importation of product data from different Fiat car models

The Immediate Benefits Immediately following the successful multi-site TcAE configuration FIAPL workers began effectively managing data across all connected locations in real time while maintaining the central control and release system The linked databases ensured that every employee from the design room to the manufacturing shop floor was using updated accurate product data This streamlined exchange of critical

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

information led to widespread collaboration during production of both Fiat and Tata Motors vehicles

The Long-term Benefits The Teamcenter PLM solution increased FIAPLrsquos productivity and brought greater efficiency to its manufacturing processes FIAPL design engineers easily modify and improve products in Teamcenter which results in much faster time to market Further long-term benefits include bull Improved global collaboration between FIAPL design and manufacturing teams bull Reduced product development costs due to reuse of product data bull Enhanced data management capabilities with Teamcenterrsquos dynamic product information databases bull Greater visibility over manufacturing activities leading to better decision-making

Why Tata Technologies Tata Technologies has years of experience in selling implementing and supporting Teamcenter PLM solutions for the worldrsquos top automotive manufacturers as well as a strong partnership with Siemens PLM In addition Tata Motors is a long-time partner to Tata Technologies The automaker has leveraged this beneficial relationship on many occasions to ensure that it maintains its

competitive edge among its highly regarded peers

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Marketing Strategy ndash FIAT INDIA

Sales Statistics Indian Scenario1048707 Total Industry Sales 2009-10 15 million units sold

1048707 FIAT experienced 207 Units growth of Domestic Market Year

1048707 84 growth of Exports

Product

Strongest Element of Marketing Mix

Offers cars as Basic Product

Presence in Segment Small Car Midsize Saloon

Petrol and Diesel variants

Petrol and Diesel engine supplies to Tata Motors and Maruti Suzuki India Ltd

Will supply engines to commercial vehicle manufacturers

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Awards FIAT Linea

Awards Grande Punto

Technology

Engines

Design

Comfort

Style

Safety

lsquoCar of the yearrsquo award by UTVi Autocar 2008lsquoMidsize car of the yearrsquo by both UTVi Autocar 2009

lsquoMidsize car of the yearrsquo by CNBC Overdrive 2009lsquoBBC TopGear Medium Saloon 2008rsquo by TopGear

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Market Opportunities amp Industry Trends

1048707 Huge Population over 11 billion signifies large market

1048707 100 FDI allowed for the Indian Automotive Sector

1048707 High Distinctiveness in Demand for all segments of cars

1048707 Substantial rise in Disposable Income

1048707 India is expected to be Global Hub for Automobile Manufacturing

1048707 Passenger Car Segment expected growth at CAGR of 15 over next 5 years

Business Cycle Economic Melt Down

1048707 Globally Auto industrys growth was poised

Autocar Magazines Coveted Design Award 2008

Brazils Carro Do anno 2008 (Car of the Year 2008)

Auto Inter-Americana 2008

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

1048707 Growth in Rapidly Emerging Economies (BRIC Nations) although slowed still outpacing growth anywhere else in the world

1048707 as the demographics of REErsquos market include first time vehicle owners to large extent

1048707 Level of car adoption is relatively low 11 cars in use per 1000 people

Competition

1048707 Fierce Competition from Hyundai and Ford

1048707 Maruti Suzuki is market leader with ~50 of share

1048707 FIAT INDIA is gearing up for High Level Competition

1048707 FIAT plans to combat Maruti Suzukirsquos ALTO with 1 litre small car by 2012

1048707 FIAT started exporting cars to SAARC nations following the footsteps of Maruti amp Hyundai

1048707 Message to Competitors

Maruti may have 50 market share in India but we are nowhere behind fight us to maintain the demand

Factors of Competition

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

FIAT FIRST

Product MixHatchbackSedanMicro CarLarge Variants Within Segment

Spare Parts

More focused issueEasy availabilityGenuine Parts Competitively Priced

PriceAt par with competitionExcept for 500

ServiceTie-up with TATA

Initiated FIAT FIRST

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Sales amp Distribution

Long Service Interval

Long Warranty Coverage

Genuine Spare Parts

24 X 7 Road Side

Assistance

Growing SErvice Network

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Promotion

Issues to Address1048707 Current Marketing Strategy does not work out

1048707 Despite of competitive products sales was moderate

1048707 Need to increase Exclusive Dealership Network

1048707 JV may be a possible threat for future

Punch LinesLinea Admiration GuaranteedPunto (Petrol Diesel) Crafted for True FanPunto (90hp) Indiarsquos Most Powerful DieselHatchback500 Every FIAT is 500 FIAT

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

1048707 Promotion is the weakest part of FIAT INDIA even FIAT officials admit the fact

1048707There is a need to educate the customers regarding their Hi-Tech Products amp competitiveness

1048707 Strong Promotion campaigns required to completely wipe out the deteriorated brand image

SWOT Analysis

StrengthsHigh Quality Products

1048707 Technology

1048707 Strong Dealer Network

1048707 Business Expansion

1048707 Heavy Investment

1048707 Century long presence in industry

Weakness Deteriorated Brand Image

Wrong perception about Indian Market

Poor Customer Care

Spare Part Issues

Efficient Supply Chain

Fiat has a 5050 JV with Tata Motors shares their dealer network

Currently sells through 175 dealerships of JV across 130 Cities40 Exclusive Dealers

Need to get rid of shared Sales amp Service Network

FIAT

appointed AICAR as Marketing Ad

Advertising company Orchard Ad

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Limited Product Range

Insufficient Promotion

Opportunities Brand Reviving

New Market Segments

Consumer perception

Increased Exclusive Dealership

Threats Country To Country Policy

Competitors Intention

Shared Dealer Network

Stiff Competition

Loss Of Key Staff

Business ModelBusiness Objective

Strategic Planning

CRM

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Advantages of the Alliance with Tata Motors Ltd

Increased Manpower

Customized promotion Programmes

Passenger amp Luxury Cars SUV MUV Commercial Vehicles

Dedicated Sales Teams for

Information

Customer

Separate Areas Exclusive Dealer

Target Markets

Training Programmes

FIAT First

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

Even though Fiat India had been present in India for close to a decade it had the lowest market share among the 11 players - including later entrants like Skoda India - in the growing car market Though the companys cars like the Palio were initially quite successful Fiats image suffered due to its dealers Fiat customers were reported to have faced problems because of the non-availability of spare parts and lackadaisical customer service Such problems had an adverse impact on the companys image and it struggled to compete effectively in the Indian automobile market The alliance with TM was expected to improve its dealership network and customer service without the company having to make significant investments The goodwill enjoyed by TM and the companys reach were expected to improve Fiats image in India

Even though both firms gained several advantages by co-operating they also faced significant threats The TM-Fiat Auto alliance was expected to face intense competition from other automobile manufacturers in India some of who were in the midst of forming their own alliances In February 2005 Renault SA formed a 4951 joint venture with Mahindra amp Mahindra Ltd The alliance was to launch the Logan a sedan which would compete against TMs Indigo Toyota Motor Corp and its subsidiary Daihatsu Motor Co Ltd had plans to launch a new small car for the Indian market More significantly MUL was all set to challenge TMs diesel supremacy by entering the diesel car market in a big way

Outlook

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom

India was one of the fastest growing automobile markets in the world with passenger car sales forecast to reach two million units per annum by 2010 As of 2006 small cars made up more than two-thirds of Indias passenger car market Even in the future at least in the short to medium term the small car segment was expected to remain the largest segment of the market Therefore in spite of the intense competition the TM-Fiat Auto joint venture was aiming to make an impact in this high-volume segment Obviously Tata-Fiat [Auto] JV is entering an over-crowded and a price sensitive segment But this [small car] segment which contributes to more than 60 of the total car sales will remain a key segment in the Indian car market for many years said an auto analyst

ReferencesI wwwfiatcom

II wwwtatamotorscom III ICMR case book on Business StrategyIV Business Standard NewspaperV Economic Times Newspaper

VI wwwteam-bhpcom