Recently, FCA India Automobiles Private Limited announced that they plan to pull the Fiat brand out of India and focus more on their other brand, Jeep. Founded in the year 1997, this subsidiary of Fiat Chrysler Automobiles Italy is India’s ninth largest manufacturer of cars, a number that hints at its trailing sales when compared to those of competitors like Honda, Nissan, Hyundai, and more. With regards to their latest announcement, we explore whether this decision is purely a sales-driven one. Let’s find out!
Fiat’s dismal sales in India
Fiat’s sales in India have been consistently poor in the face of competition. Although one cannot dispute that these cars are well-designed, the average Indian consumer values other factors like customer service far more than the actual build of the car. With additional factors like Fiat cars having expensive spare parts and the fact that maintenance charges for cars like Linea and Punto are on the higher side, consumers never truly warmed up to this brand.
Knowing this, Sergio Marchionne hinted at Fiat’s potential exit from India way back in 2017, at the Geneva Motors Show. In an interview with Auto Car, Marchionne went so far as to say “Fiat has had many chances in India and now it’s Jeep’s turn.”, making people believe that it was only a matter of time before this brand left the Indian market.
So, why now?
Safety and Emissions Regulations Act – The Final Nail in the Coffin
The Honourable Supreme Court of India barred stage BSIV vehicles from being sold in India post-April 2020. This is because BSVI, India’s latest safety, and emissions regulations, will be implemented by then. A huge difference in the two regulations is the amount of sulfur present in fuels that comply with the norms. While BSIV fuel has 50 ppm sulfur, BSVI fuel only has 10 ppm sulfur. Furthermore, these new regulations will also reduce the amount of nitrogen oxide released by diesel cars by 70% and 25% in petrol cars.
BSVI also makes onboard diagnostics a compulsory device for all vehicles. These devices indicate whether all systems within the car are good to go.
If Fiat were to comply with these new regulations, it would have to invest a significant amount of money in a market where the company is already running in huge losses. So, the most sensible decision was to pull the products out of India and focus on a car (or brand) that has shown a lot more promise in the Indian market – the Jeep!