Tata Motor's escalating
unhappiness with the joint venture it has with Fiat in
India has spilt over at the 81st Geneva Motor Show this
week with the Indian carmaker's CEO Carl-Peter Forster
telling journalists that Fiat needs to make up its mind
where it wants to go in India.
In recent weeks Tata
Motors' senior executives have been quite open in their
criticism of the joint venture which has seen its sales
slide despite the launch of well received models such as
the Grande Punto and Linea, both of which are both
assembled locally by the jointly-controlled company Fiat
India Automobiles Ltd (FIAL). Setting up standalone
points-of-sale has been mooted as a possible fix
particularly as the Tata-Fiat shared showroom concept
hasn't worked in Fiat's favour, but this is little more
than just putting plasters on gaping holes, Fiat's
lukewarm commitment to a serious drive to achieve
volumes in India mean the venture has deep seated
problems.
"We have to decide
whether Fiat sees India as a secondary market or a
primary market," Forster told Dow Jones Newswires
at a dinner that look place in Geneva this week to
commemorate the 50th anniversary of the Jaguar E-Type.
English premium brand Jaguar, as well as its stable mate
Land Rover, are both now owned by Tata Motors.
Finding customers is
currently a big problem for FIAL. For the full year of
2010 FIAL's sales came in at 15,184 units, down almost
three thousand units compared to the 18,065 units it
achieved in 2009 when both its current models, the Linea
and Grande Punto, were launched, in the first quarter
and mid-year respectively. In true Fiat Group traditions
of touting wild targets, FIAL had predicted sales of
50,000 units in India for 2010.
For the month just
gone, February, FIAL sold 1,842 cars in India which was
well down from the 2,253 units it sold during the same
period last year. In January FIAL shifted 2,174 cars
which was almost flat year-on-year (2,215 units in
January 2010) but that was a significant improvement in
itself on December, a quieter month, when FIAL's total
came in at 271 units compared to 1,007 in December 2009.
"Fiat has to decide to
take on more of a role in India," Forster told Dow
Jones Newswires. "If it is a primary market for
Fiat, what sort of role would they look at playing in
India?" However he did say that the joint venture isn't
at risk of disintegrating, adding: "There is no question
about it."
Fiat has struggled to
establish footholds in the world's most lucrative growth
markets, and apart from Brazil where it has been
successful established for three decades, it isn't
making much headway in any of the strategic BRIC
countries. In Russia a year of talks with Sollers has
just come to a fruitless end and after its second
failure to strike up an alliance it now plans to try to
go its own way (Sollers has instead announced a
replacement joint venture with Ford). Meanwhile in China
its failed joint venture with Nanjing Auto has left it
high and dry while its rivals all churn out volumes;
however it is currently bedding in a new joint venture
with Guangzhou Auto, although its new partner is
perceived by many in China to see Fiat as not being one
of its top priorities, a similar problem that Fiat had
found with Nanjing Auto.
