Warc Blog

Automakers adapt strategies for India

20 May 2013
NEW DELHI: Fiat, Skoda and Ford are among the global motor manufacturers which have begun to adapt their strategies and product range in response to a volatile passenger car market in India.

Fiat Group has announced that it plans to expand its network of dealerships from 54 to 125 by the end of this year and aims to achieve a 5% market share in the next three years, additionally driven by new product launches.

"Fiat India is aggressively focusing on increasing its footprint in India and this launch is in continuation of rapid expansion strategy," said Nagesh Basavanhalli, the President and MD of Fiat Chrysler (India).

The revamped strategy follows a fall in sales volumes from 16,000 units in 2011 to just 6,000 in 2012. The company intends to stem the decline with a focus on nine models, including hatchback and jeep varieties.

The news comes as Volkswagen appears set to shake out its brand portfolio by discontinuing its Skoda Fabia model, which has proved expensive to produce, in favour of promoting the VW Polo.

"While globally VW as a brand is considered to be stronger than Skoda, in India it is vice versa and that has impacted the sales of Volkswagen cars," said a source. "The VW Group is looking to change this strategy."

Ford, meanwhile, is launching its EcoSport sports-utility vehicle into one of the few growing sectors of the market. It marks an attempt to reverse a 17% fall in overall sales to 77,225 vehicles in the last financial year and to generate exports.

Automakers are also having to take notice of changing government regulations on fuel which have narrowed the price gap between diesel and petrol and resulted in fewer diesel-powered vehicles being sold.

"This is a major shift," said Rajesh Singh, GM India vice president. "Companies that have flexible engine plants will adapt to the change. Others will find the going tough."

Data sourced from Business Standard, Livemint, Wall Street Journal, Times of India; additional content by Warc staff

 
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