Fiat Case Study

771 Words 4 Pages
Fiat’s performance after split-up of JV

After splitting up with Tata Motors, Fiat has been facing a really tough time in generating a good number of car sales in India despite their vehicles being very good. It has been operating completely on its own with regards to sales, service and marketing. Earlier, Fiat did come close to 25,000 car sales mark but now, it is now struggling to do half on its own after the split-up of JV. In January 2012, it launched upgraded versions of its existing Linea and Punto models followed by the launch of three vehicles in 2014. The Linea also underwent a massive update in terms of both exteriors and interiors while the Punto Evo was also subjected to some extensive changes in the face of rising competition
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First of all, the company is still lagging behind its rival’s sales and service network. There have also been various reports stating that Fiat cars have quality as well as some reliability issues in the long term hurting brand credibility. Also, the launch of the Jeep and Abarth brands to gain market share has been getting delayed and some other launches from global portfolio have been scrapped. Macroeconomic factors like falling GDP growth, poor consumer sentiment also dragged down sales in FY14. The firm is pushing ahead with its manufacturing investment and has lined up Rs 175 crore from State Bank of …show more content…
It could have worked especially well for Fiat had it taken its collaboration with Tata Motors to the next level by jointly developing cars and platforms and selling them as Tata-Fiat or Fiat-Tata depending upon mutual agreements of the alliance. For Fiat, having such a manufacturing arrangement would have helped it to deploy different cars in different price bands without there being an overlap and resulting cannibalization of sales. The question of competitive selling between both the brands on the same floor space would also have been solved. Tata would have benefitted by getting the strength of quality while Fiat would have got the numbers. For Fiat, it would also have resulted in economies of scale and significant cost benefits which has been put to good use by Nissan-Renault at their Chennai plant where both the companies are manufacturing cars jointly on the same

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