Fiat India plans to setup its own dealership network in India, which will be independent of Tata Motors. This could lead to the Italian automaker making the much anticipated move of going solo at the distribution level. The joint venture with Tata Motors has not really worked at the dealer level, where the casual approach of the salesmen have pushed Fiat buyers to purchase Tata vehicles. Now Fiat has revised its products for the year and plans no new launches. Instead the company will concentrate on making the buying experience better.
Currently Fiat cars are retailed through Tata-Fiat dealerships. These dealerships don’t really do justice to the vehicles that Fiat has to offer to the Indian market. Thus Fiat will be setting up twenty independent Fiat dealerships across major cities in 2012. This wil result in Fiat cars no more being sold at forty Tata-Fiat dealerships. However in smaller cities and towns, Fiat will continue to use Tata Motors’ distribution network to sell its cars as the low volumes in such places don’t justify the additional investment in showrooms.
Fiat is trying to encourage dealers to open Fiat exclusive showrooms and is considering the hike of dealers margins from the current 5% to 8.5%. But this won’t be the end of the Tata-Fiat joint venture as both companies will continue to collaborate. Some revisions will be in the JV with Fiat continuing to supply Tata Motors with Multijet engine technology, while Tata Motors will continue to handle the manufacturing of Fiat cars in India. This move of opening exclusive Fiat only dealerships should boost sales for the company.
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via Moneycontrol
