Fiat's got a plan to beat the slump in passenger vehicle market
Fiat will rely on Jeep Compass SUV, followed by a mid-cycle action of a Compass SUV in 2020, to keep relevant.
Till the time the domestic market bounces back—which is widely expected to be in 2020-2021 after automakers have moved completely to producing BS VI compliant vehicles—the company will rely on flanking it's Jeep Compass SUV with a diesel automatic, 4X4 off-road ‘Trailhawk’, followed by a mid-cycle action of a Compass SUV in 2020 to keep the brand action alive, people aware of the company’s plan said. These initiatives will be executed before the company signs off with all new products like the seven-seater SUV based on Compass and the small B SUV for the coming years.
Kevin Flynn, MD of FCA India said the company has invested to be part of the long-term growth of this market. The current slowdown, according to Flynn, is a temporary phase and once the general election is over, the market will bounce back.
“We are eager to see the reality of that potential growth, economy and the capability of people to increase the market in segments that we compete. The plan is to enrich the range in India. We have added variants to the Compass at the entry level as well as top of the line, which has brought in incremental buyers and very soon we will be launching Trailhawk with the BS VI engine,” said Flynn. After a successful FY18, FCA Group India registered a 17% decline in sales in FY19 to 16,079 units, leaving it with a market share of about half a percent.
Although sales of FCA have fallen, Flynn said he is not perturbed as the overall market environment is weak and he is happy that Compass has been able to hold on to a respectable market share in its premium mid-size SUV space. The product action plan is to hold on to its own amid the rising competition in the segment—with the launch of Tata Harrier earlier in the year and the new MG Hector launch round the corner.
Fiat is not resorting to pushing inventory in the market. Flynn said, “Our emphasis is on maintaining 21 days’ inventory at the dealers. We could also show an artificial growth by pushing inventory in the market, but that won’t be healthy for the entire ecosystem.” As for FY20, Flynn said that despite the tough market environment with the new product action, the company will protect its position “if not actually step up a little”.
The company has expanded its dealership footprint to 82 outlets in 70 cities and is using the current phase to consolidate its presence in the market. In June last year, FCA global had announced that the company will launch a seven-seater Compass and the small SUV for the Indian market.
“We did make the announcement back in June that we will work on to further products and we diligently do that. At the right time you will hear from us on that. Till then it will be interesting to see the transition from BS IV to BS VI and how the market evolves itself in the future,” Flynn said.