FCA will work on its new cash cow, the Jeep brand which is doing well for now in the Indian market with just one car for the masses.
It was suspected for a long time and finally, Fiat Chrysler Automobiles (FCA) has decided to pull a plug on Fiat brand in India. Fiat’s portfolio in India consists of the car likes Grand Punto and Linea (and their derivatives) which are unlikely to be updated for upcoming safety and emission norms. Both of these cars have been on sale for around a decade and the company has made no investment so far to make them ready for the upcoming regulations.
The combined sales of Grand Punto and Linea between December 2017 and November 2018 stood at 101 units and hence, making an investment in these products which have been stretched well beyond their life-cycle doesn’t make a business sense. Not only the models, but Fiat’s famous 1.3-liter multi-jet turbocharged diesel engine will also cease to exist once new BS-VI emission norms come into effect from April 1, 2020.
Both the major customers of the 1.3-liter diesel, i.e., Maruti Suzuki and Tata Motors are working on to develop their own diesel engines and switch over from the multi-jet to their in-house developed power trains very soon. In the absence of demand from the external customers, it’s not prudent for the Fiat to spend resources on upgrading the multi-jet diesel for meeting stricter emission norms.
For reviving the fortunes of the brand, Fiat will require an all-new range of products which obviously calls for investment worth thousands of crores. According to the estimate, Fiat has to spend around Rs 4,300 crore to bring back its portfolio to life, but in the wake of almost nonexistent demand for its products, FCA is unlikely to play such a high-risk gamble. What instead the parent company will focus on its Jeep brand which has been able to strike a chord with the customers. Now its time to buy those Abarth’s before they are gone, forever.
