Business Daily from THE HINDU group of publications
Friday, Jul 07, 2006
Business Daily from THE HINDU group of publications Friday, Jul 07, 2006 |
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Corporate
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Interview Marketing - Market Shares Fiat India eyeing 5% market share by 2010 Mayur N Shah
MR GIOVANNI DE FILIPPIS, Managing Director, Fiat India. — Paul Noronha
Mumbai , July 6 Auto major Fiat is keen to boost market share in India. Mr Giovanni De Filippis, appointed Managing Director of Fiat India with effect from October 1, 2005, talks of the company's growth plans in an interview to Business Line. Excerpts: Fiat has had its share of ups and downs. How does the company look forward to its presence in India now? Yeah, you are right, we are here from 1997-98. Of course, our relationship with the country has been one of the oldest that any automobile manufacturer has had so far. With respect to our presence in the country, you can definitely look at growth from our end. We are planning to have 5 per cent market share by 2010 and in order to meet this target, certain activities and product launches will be undertaken during the course of the period. Now we shall concentrate on areas where we lacked in our operations previously. Therefore, focus will not be on models but operations such as commercial network and as you see we are already addressing this problem through our cooperation with Tata Motors. Previously, there were other organisations that worked in tandem with Fiat India. One of them was Fisaf. It was discontinued then. Are you planning to launch it once again? In retail finance where Fisaf was present earlier, you shall notice that our commercial tie-up is now extended to Tata Motor Finance who shall finance our cars. With respect to introduction of Fisaf, we will move according to market trend though I don't see it happening in the near future. How has the alliance with Tata Motors changed your day-to-day activities? Where is the focus now? I would say that the alliance is still at its nascent stage and will be defined in a broader aspect at the global level by senior management of the companies. The outcome of the tie-up is the commercial part of it and we feel very positive about it as it is working very well. We have our marketing and product team very well integrated in order to support all the activities. Besides the alliance, we are looking at various activities such as continuous supply of spare parts that was a big concern for our customers. Earlier, some of our component suppliers had difficulty in supplying parts for after-sales service. Now that problem has been solved and the new spare part prices are in line with competition. . I would like to add to this that we have reduced the number of dealers present in the country, thus eliminating the non-performing dealers. The existing dealers are now selling more cars than they sold last year thus performing better than before. Besides the marketing alliance, the agreement also involves sourcing of technologies, power trains and major aggregates from Fiat, sharing of common vehicle platforms between the two companies and even possible joint development of models that could be badged and sold by both companies in different markets. Do we expect these activities to occur in the near future? True, we are very focused on the activities. We are painting Tatamobile bodies at our Kurla paint shop. This is one of the activities carried out in order to avoid taking money from our parent company (laughs) and generate more revenue for the Indian subsidiary. Since we had spare capacity at our Kurla paint shop, we opted for this exercise that will be for a limited period but beneficial for the companies. The other activities are in discussion at a more strategic level and announcements will be made at appropriate times. Is there an infusion of funds from Fiat S.p.A in order to cater to your existing activities? All that time when Fiat has been here in India, there has been a certain flow of funds for the company. It has been announced regularly and of course this situation has continued but we wish to stop the infusion of funds; not that we don't want the money but we would like to post a profit for the Indian subsidiary. What part of the funds infused is for Ranjangaon? It is clear that new investments are not slated for Kurla; we are going to define the best allocation i.e. Ranjangaon, as it is an opportunity and we have something already in place and thus production is most likely to begin shortly at the green facility. We are currently using it as a training ground for dealers. Due to last year's monsoon experience at Kurla, we have shifted our finished goods (cars) to Ranjangaon. We are currently working in order for you to see the production line in the beginning of 2007. If Ranjangaon is going to be the production hub, then what happens to Kurla? We are talking about future investments and future possibility, but for the time being, Kurla is our factory and we have only one factory. There are several opportunities and we are exploring them, that's all I have to say. Where does the company' focus lie with respect to its range of models, considering media reports that you are most likely to launch the Punto and the Panda? For sure, the company's focus lies in the B and C segment and I believe for the quality of the models that Fiat has delivered up till now and will be delivering in the future, we will be present in (B plus and C plus) segment. I think we have to continue with this philosophy in the market and the market is growing. If we get 60,000 cars in the first year, it's enough for us (laughs). But jokes apart, if I were to analyse the market in India; it is growing so rapidly and the society is changing so fast that it will become more and more sophisticated. So there will be room to create more segments and these segments will have many sub segments.
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