Case Study Fiat Auto

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Fiat
Fiat Auto, one of the pioneer companies in the automobile industry and the largest automobile manufacturer in Italy, has a very luminous history in automobile industry with its first car being built in 1899. Around 1990s, Fiat Auto dominated the small car market in Europe and other parts of the world.
Fiat’s presence in India can be traced back to 1905 when the vehicles were imported and sold through its sales agent named Bombay Motor Cars Agency. Further in 1951, Fiat entered into a license and service agreement with Premier Automobiles (Premier) to manufacture its cars. As the liberalisation of Indian economy happened in 1990s, Fiat established a wholly-owned subsidiary in India in 1995. Fiat then entered into joint venture with Premier
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It resulted in decline in market share in European as well as Indian market. Although it had been over a decade since Fiat India’s birth in India, it was ranked last in the existing eleven players in Indian market as far as market share was concerned. Hence to tackle with the situation, the company adopted a turnaround strategy in 2002, which comprised of several measures like cutting costs and focusing on markets with demand for small cars, which had been Fiat Auto’s forte. As India was an important emerging market for small cars, Fiat Auto decided to revive its operations in the Indian market. The alliance with Tata Motors was a step in that…show more content…
- However, in the first quarter in 2010-11 the JV reported profit of Rs. 22 crores, against loss of Rs. 166 crore in the first quarter of 2009-10. Revenues doubled to Rs 967 crore from Rs 473 crore. The capacity utilisation at the plant also saw an increasing trend. In 2009-10, it produced 24,000 cars and in 2010-11 it planned to double the production. As per press release by Tata Motors Ltd dated 15 August 2010, the JV was expected to breakeven by 2011-12

- In 2012, the country’s biggest car maker Maruti Suzuki India Ltd (MSIL) planned to buy 100,000 diesel engines a year for the next three years from the joint venture, Fiat India Automobiles (FIAL). This move by MSIL was driven by excessive demand for its diesel models such as the Swift, DZire, SX4 and Ritz. The limited supply of engines forced Maruti to restrict the diesel offering to only four models. The same engine was already licensed by Fiat and manufactured by Suzuki Powertrain India and these supply volumes from Fiat were in addition to that production.

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