Chrysler could do to Fiat what Jaguar Land Rover did to Tata Motors today.
Chrysler was among the early birds keen on entering India’s car sector in the early 1990s. The company was to have tied up with Mahindra & Mahindra to bring the Jeep Cherokee to India, but the proposal died an abrupt death.
Over two decades have passed since, till Chrysler announced last week that it would debut in India along with its established parent, Fiat.
It must be a special moment for this iconic brand which, along with General Motors and Ford, was the face of Detroit during the happy days of the US automobile industry. Today, it could well be the lifeline that Fiat so desperately needs as its goes about rebuilding its Indian innings.
Automotive analysts believe that Chrysler and its Jeep brand are integral to this comeback effort. “Here is a young India that is hopelessly hooked on to sport-utility vehicles. And the Jeep brand is right up there as the world’s best,” they say.
The JLR analogy
To that extent, one would not be completely wrong in presuming that Chrysler could do to Fiat what Jaguar Land Rover is to Tata Motors today.
At that point, there were many people who sneered at the Tatas for this expensive buyout especially when it coincided with the global slowdown and things began looking extremely grim.
Today, JLR has been an incredible turnaround saga with new facilities being planned in China and Saudi Arabia. While Tata Motors’s domestic passenger car business is little to write home about, JLR has been growing from strength to strength. Similarly, Fiat has just about frittered away every opportunity here despite the fact that it had the highest brand recall among all automobile brands entering the Indian market.
A large part of the blame could be attributed to its Turin headquarters which, perhaps, had little time for this part of the world and had its own issues to deal with. However, when Sergio Marchionne took charge as CEO and sealed the alliance with Tata Motors, the first revival seed had been sown for Fiat.
Sales continued to be sluggish, though, and this was tremendous cause for concern. A couple of important events, which occurred in the last three years, could now tilt the balance in the Italian automaker’s favour.
The first was the move to acquire Chrysler as Detroit began sinking in 2009. The other was setting up an Asia-Pacific base less than a year ago where Shanghai as headquarters will liaise with India, Korea, Japan and Australia.
Fiat also called off its joint marketing tie-up with the Tatas (the manufacturing arrangement continues) to go it alone as part of the brand-building effort.
It is here that Chrysler, and more specifically the Jeep brand, will have a big role to play in putting the India house in order all over again. The Wrangler and Grand Cherokee will be the first vehicles to enter the market in end-2013 followed by two more SUVs in ’15 and ’16, which will be manufactured at the Tata-Fiat plant near Pune.
It is a carefully thought out strategy keeping in mind the growing craze for SUVs. Fiat’s line-up for the next 3-4 years is relatively more modest with a refreshed Linea and Punto along with its own SUV. It is crystal clear that Chrysler will play an important role in the India journey.
Both Fiat and Jeep will have exclusive outlets, at least for sometime, to ensure that there is no brand dilution which was the case in the retail business model with the Tatas.
From Chrysler’s point of view, the India story is finally happening after a long, long wait.
That a tie-up with M&M would happen in the early 1990s seemed a mere formality given their Willys Jeep brand association for so many years.
Chrysler also had a marginal stake in the company but the unexpected happened when M&M opted for Ford as partner.
Chrysler then kicked off talks with Bajaj Auto which, like almost every other Indian automaker, was also keen on entering the car territory. Talks boiled down to an Asia-specific model but the idea was eventually dropped and Chrysler was left out in the cold yet again.
Bigger things were, however, happening back home in Detroit where a mega merger proposal was being discussed with Daimler of Germany.
It was touted as one of the biggest marriages in the automobile industry where an American and European brand would come together to create history. Exciting possibilities were envisaged for India too where Daimler was already present.
It was quite clear though that the German carmaker was not in a tearing hurry to launch Chrysler products.
This could have, perhaps, stemmed from the desire to establish its own car brand first and not risk any dilution possibility with another (brand).
The bottomline was that Chrysler was not going to be part of Daimler’s menu for India. In any case, the dream marriage was coming unstuck at the global level and the American brand was on its own again by 2007 after it parted ways with Daimler.
Two years later, it was part of the bankruptcy brigade in Detroit and this was when Fiat stepped into the picture to pull it of the abyss.
Today, the converse is happening with Chrysler being an important lifeline for its Italian parent in a depressed Europe. The next stop is India.