1. What is Fiat’s current situation in India?
Fiat India in Indian car market is facing the dilemma of poor sales. As the result, Fiat Motor and Tata Motor joint venture will be redeployed the dealer network to cope with the current issue in Indian car market that Fiat India faced. It is very hard for Fiat top brass to believe the fact that their cars are suffering decline in sales figures when the industry is growing at an average rate of 34% annually. (RushLane, 2010) Fiat Motor is also planning to launch exclusive brand showrooms and stores by themselves, which means Tata Motor will not work together and get involved with Fiat Motor this time. In addition to that, according to Indian media reports Automotive News, Fiat India is not satisfied with its monthly sales, which continue to remain low even after the launch of the Fiat Linea and the Grande Punto. These new brand stores of Fiat will be called as “Image Points”, and they will be launched in Mumbai, Delhi, Bangalore, Pune and Chennai at first. (Drive Inside, 2010) At the same time, Fiat will continue to the products of Tata motors through shared dealerships. Ramakrishnan said the Fiat cars would continue to be sold at the existing Tata-Fiat showrooms. Mr. Kapoor said that the exclusive brand stores would help generate sales enquiries and focus on brand promotion. Sales enquires will be passed on to dealerships. The company has also consulted Accenture to help them out to become high-performance business by suggesting improvements and analyzing the weaknesses and strengths in India.
2. What is the business opportunity in India? Do you think that Fiat needs a partner?
India is the largest democracy in the world and their policy of liberalization pursed by the government in 1991. To encourage investments, the government has allowed import of capital goods at concessional rate of customs duty and liberalization of external commercial borrowing norms, and tax holiday. The factors that generate business...