Adopting the export strategy of rivals Hyundai, Maruti Suzuki and Nissan-Renault, Italy’s top automaker Fiat is planning to make its Ranjangaon plant near Pune a global hub to build cars for the UK, Japan and Australia. The move will give Fiat economies of scale at a time of flagging domestic volumes. The export strategy also makes sense since the utilisation level of this plant, which has an annual capacity of 1.35 lakh cars, is around 50%.
Enrico Atanasio, MD of Fiat Group Automobiles India, said: “There are cars being developed specifically with India in mind and the idea is to make the country a hub for right-hand drive markets. We can export to major markets like the UK, Japan and Australia and many nations in Africa.” He added that India was expected to emerge as the third-largest car market globally in three years, after China and the US. “We believe this market has huge potential. There is very little to cross Brazil and Russia in sales and Japan is in a bad shape. We are currently using less than 1 lakh capacity at Ranjangaon and can expand to 1.80 lakh units a year when we launch new products,” he said.
Fiat is planning to launch two brands in India this year — American SUV Jeep and racing division Abarth. A market study is on for introducing other brands like Fiat Commercial (LCVs), Alfa Romeo (sports cars) and Chrysler (premium cars) at competitive prices. Nine new products are expected over the next three years, of which four will be from Jeep. The imported Wrangler and Grand Cherokee models will come this year, while two more smaller SUVs in the B segment priced R10-12 lakh and C segment in the price bracket of R14-15 lakh are under development and will be launched by 2014-15. “The B-segment SUV will be totally new and India will be a pilot market before we take it worldwide. In terms of size, it will be similar to the Renault Duster or Ford Ecosport. Over the next quarter, there will be massive market research in India,” Atanasio said.
The strategy to make India a global hub for compact cars and SUVs follows declining sales in its primary European market and the search for new geographies. India, which is similar to Brazil where Fiat is the market leader, offers a low-cost manufacturing destination with a huge captive market and a competitive component vendor base. It also has close proximity to various emerging export markets in Africa and South Asia.
Nissan already exports over two times more cars from India than it sells at home, while Hyundai exports 39% of its local production.
Fiat itself will launch another B-segment SUV, expected to be priced below Jeep at around R7-8 lakh. Meanwhile, the Punto and Linea range will be refreshed and the range expanded with new models.