Financial Daily from THE HINDU group of publications
Thursday, Jan 08, 2004
Industry & Economy
Fiat's Panda to turn the heat on Rover in UK?
Shyam G. Menon
Mumbai , Jan. 7
SIX years since senior Fiat India officials gasped at a Palio-like Indica debut at the 1998 Auto Expo in New Delhi, it appears to be the turn of the Italian major to shadow the Indian car's prospects overseas.
According to mid-December reports on the Internet, Fiat's new Panda which was voted `European Car of the Year 2004' will go on sale in the UK later this month with its base model - the 1.1 Active - priced at £6,295 (approximately Rs 5.16 lakh).
That makes the Panda's entry model £200 cheaper than the cheapest variant of the City Rover, essentially the Indica in MG Rover garb. The City Rover's Solo model costs £6,495 (approximately Rs 5.32 lakh). If prices quoted on the Web are anything to go by, then the Panda undercuts the City Rover right up to the top end.
The City Rover's Sprite, Select and Style variants - positioned upward of the Solo - cost £7,895 (approximately Rs 6.47 lakh), £7,895 and £8,895 (approximately Rs 7.3 lakh) respectively.
Against this, the Panda's 1.2 8v Dynamic reportedly costs £6,895 (approximately Rs 5.65 lakh) with three variants from then on - Dynamic Sound, Dynamic Air-Con and Dynamic SkyDome - costing £600 pounds more. The top model, as at mid-December, was the 1.2 8v Eleganza priced at £8,095 (approximately Rs 6.63 lakh) and reports talk of a 70 bhp 1.3 Multijet diesel version in the pipeline.
Further, using an accessory list it is possible to have one's Panda custom built.
The City Rover idea evolved around the need for MG Rover to have an entry-level compact car. So, does the contest with the Panda warrant a re-look at the City Rover's pricing.
"I have not seen the final pricing for the Fiat Panda but I believe that the `£6000' version is a 60 bhp/1250 cc engined car. The Solo has 84 bhp and a 1.4 litre engine, plus the benefit of the Rover badge," MG Rover's official spokesperson said, citing value-for-money as a point in City Rover's favour. He confirmed sales of the compact car have commenced in the UK. Motoring reports see comparable rivals in the Citroen C2, Skoda Fabia and Volkswagen Lupo.
Asked if the Solo's sales could be affected if price was retained at previous level, the spokesperson said, "We think that the overall package is very competitive."
While it is for the market to decide eventual sales mix, MG Rover anticipates a fairly even division of sales across the City Rover's four variants. "It's a little early to say but dealer feedback has been very positive. They felt that it is a car that they can sell," he said on market response to the City Rover.
Last year Mr Kevin Howe, Chief Executive, MG Rover, had remarked soon after the roll out of the first City Rover in Pune, "From a European perspective, a small car is really, really important. The small car segment is growing generally in Europe, but it has been important for a long time particularly when you go towards the South. It is very important for our dealers from a throughput point of view that we actually get this car in the market and show it can be successful."
MG Rover's expectations from its India-made compact car may have risen since. Media reports show that the company's sales dropped sharply in November ahead of City Rover sales. There was also a brief halt to production at the Longbridge plant to balance dealer stock levels.
The company's spokesperson maintained these developments have no impact on the promised offtake of cars from Tata Motors, the five-year agreement between the two companies envisaging export of almost 100,000 cars. "Our volume planning for the car has not been affected by sales in the final quarter of the year. Overall, sales in the UK are about the same as the previous year," he said.
In sales figures disclosed on Monday, Tata Motors reported total export of 4,001 vehicles in December 2003 as against 533 vehicles in the year ago period.
Cumulative export sales for the first nine months of FY04 were up almost 150 per cent at 15,008 vehicles. With high domestic sales and export commitments, the company is believed to be tackling a growing production crunch.
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