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Fiat Chrysler to reboot India story with Jeep

Murali Gopalan | Updated on March 10, 2018

Game changer? Fiat Chrysler looks to the Compass to drive Jeep’s volumes in India

Launched in Brazil, Compass SUV will be made locally in India in 2017

It was during the early hours of Tuesday in this part of the world when Fiat Chrysler Automobiles (FCA) announced the global debut of the Jeep Compass in Brazil.

This all-new compact SUV will make its way to India next year where it will be locally manufactured at FCA India’s Ranjangaon plant near Pune. In the process, it will become part of the country’s most buoyant product segment where a host of players have thrown their hats into the ring.

It was barely some weeks ago when FCA launched the Jeep brand in India. The Wrangler and Grand Cherokee are intended to contribute to the brand building effort before the more competitively priced Compass plays the lead role in the volumes game.

Given that the recently launched Jeep duo is directly imported, they are priced nearly thrice as much thanks to the hefty duty levies. It also puts in context why they will reach out only to a niche clientele while the locally-made Compass will be far more affordable. From the point of view of Kevin Flynn, the President & Managing Director of FCA India, Jeep comes out of a “massive commitment” which reflects the group’s long-term goal to be successful in the country. FCA India MD says it is absolutely imperative that the Jeep brand clicks and that he would “be gravely disappointed” if it does not. “With its sheer gravitas of a global brand and the impact Jeep has had on segments around the world, there is no reason to believe why it will not work in India,” he adds.

Flynn is too aware that a directly imported product like the Grand Cherokee or Wrangler will attract a limited number of buyers. This is why local manufacturing (of the Compass) become relevant in the long-term. “The plan is more robust and we invested money in Ranjagaon which means we can handle more platforms,” he says.

As part of the Jeep script for India, the company has identified key markets where there are customers ready to pay for the directly imported premium brands. When the Compass debuts next year, there will be good reason to grow the network and woo the mass market.

It is clear that FCA is betting big on Jeep to stage a turnaround in India. Fiat has, of course, had a much longer association here going back over six decades. This was the time it partnered Premier Automobiles and the brand grew over the years. When the country opened its doors to multinational carmakers in the early 1990s, Fiat also made known that it was going to be part of the new growth story. The script started off with a bang when the Uno took on market leader, Maruti, but a series of setbacks followed where everything just went awry.

Each time Fiat attempted a comeback, there was hope (as in the case of Palio) followed by acute disappointment. Perhaps, some of this also had to do with headquarters in Turin grappling with its own set of problems which meant enough attention could not be devoted to India.

Revival efforts included joining hands with Tata Motors where the manufacturing initiative yielded better results than the efforts in joint retail. Globally, though, the merger with Chrysler and the creation of FCA meant that a stronger global entity was now in place. More importantly, it had a top-seller in the form of the Jeep brand.

Flynn is keen to reinforce this message in India. “For us, we need people to see it as FCA, which goes beyond Fiat, and understand more.” he says. Doubtless, Fiat is a huge player in Europe and Brazil and the challenge is “to find the road forward from where we are”.

Jeep will lead the way and the fact that there is a young generation of affluent buyers in India only means that the sky is the limit. From the company’s point of view, these customers are not going to be bogged down by legacy issues since they are far more futuristic in their outlook. They also know too well that Jeep is a successful brand worldwide and would, therefore, be more than willing to try it out.

“I think it is possible to change people’s opinion and I want to reconnect with them and be considered a good option. I need to tell those people that it is worth a try,” says Flynn. He also maintains that it is the quality of the cars coming out of the Ranjangaon plant which should give buyers the confidence especially in the department of safety.

Flynn then refers to Global NCAP’s crash test results in India and says he is amazed that certain vehicles are not as safe as they should be. What is even more bewildering is that not too many people care about safety either. On his trips from Mumbai to Pune on the expressway, he constantly notices the lax levels of driving discipline where cars weave in and out, making the entire journey rather intimidating.

On the face of it, FCA has everything going in terms of rebooting its India innings which has been jinxed all these years. The product is in place but the need of the hour is to ensure that the front-end in terms of sales and service keeps pace. The company just cannot afford to slip up yet another opportunity to put its house in order again.

Published on September 29, 2016

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