Fiat to launch new small car for India in 2012

Fiat India is preparing a small car to be launched in India around 2012. The car is being designed and tested in Fiat’s facilities in Turin, Italy with inputs from its Indian engineers.

“The small car is under development. We had announced earlier that our intention is to launch it in 2012. The exact timing and details will be shared when we will be ready with the product,” Rajeev Kapoor, MD, Fiat India was quoted as saying by The Economic Times.

The small car would likely have 80-85% localization so as to help the Italian car maker price it competitively in the Rs. 3 – 5 lakh range. In January 2011, CarToq.com had reported about Fiat’s small car as per information from a Fiat India official. (Read that story here)

fiat 500 colors photo
Photo: The new Fiat small car is being developed specifically for India in Fiat's R&D centre in Italy.

The car will be powered by a 1.0 litre engine and its design will not resemble any of Fiat’s other models. The new small car, according to Kapoor (quoted on January 2011) will target Maruti Alto buyers and the company’s R&D team is working to develop this car to best meet the customers’ needs.

Since Fiat has been an expert in manufacturing small capacity diesel engines, the upcoming small car will be more appealing to buyers if Fiat plans for a 1.0 litre diesel motor. A live example of the 1.0 litre diesel engine derived from Fiat’s 1.3 litre Multijet engine is the Chevrolet Beat diesel which returns a mileage of 24 kmpl. The same engine could be produced by Fiat and that would make its upcoming small car more frugal.

One of the biggest hurdles that Fiat India faces is its sales and marketing. Fiat tied up with Tata Motors for sales, distribution and service of its cars through Tata dealership and service network. However Fiat’s two key models, the Grande Punto and Linea are not selling as well as their competition.

Whether Fiat India will start new exclusive dealerships and service networks, or whether it will re-structure its existing sales and service team is unclear. But either ways, the company must tackle these problems well ahead of the small car launch to ensure atleast the upcoming model reaches the target audience without management road blocks.