Fiat to set up independent dealerships, finally!

Fiat India is planning to open exclusive dealership showrooms and service centers across 20 cities over the next one-and-a-half to two years.

“We are altering our marketing strategy. We have identified 20 cities where Fiat cars will now be sold separately and independently,” Rajiv Kapoor, President and CEO, Fiat India, was quoted as saying by the Business Standard.

Outside of the chosen cities, Fiat will continue to sell through Tata dealerships.

fiat grande punto india photo
Photo: Fiat will now sell the Punto and Linea via independent dealerships

Besides, Fiat India will open two Fiat cafes, one each in Delhi and Pune, for promoting the brand by bringing ‘Italian-ness’

The move was long due—perhaps overdue—considering Tata dealerships had difficulty servicing the more sophisticated Fiats. Fiat suffered both on sales and after-sales support because Fiat cars were competing with Tata’s own cars.

Tata cars were cheaper than Fiat cars, so dealers found it easy to push and sell Tata cars. As a result, Fiat never got the dealer push in the market its cars deserved.

On the service front, Fiat owners had a different level service expectations, while Tata service centers catered to a different customer profile. In addition to that, spare parts availability was also a problem that Fiat could not fix at its end.

With a separate, focused dealer and service channel, Fiat cars could finally get the attention they deserved. But then Fiat will have to build a large enough network if it wants to significantly change buyer confidence on after sales service and support.

It is a bit of chicken-and-egg situation for Fiat. Unless it builds sales volumes quickly, the dealer network will not be easily incentivized. In the last six months, sales have dropped to 1,067 in August, 2011 from 2,150 in January, 2011.

Potential buyers, and fans of Fiat cars (which there are many) will be watching closely how Fiat builds its sales and service network over the next few months. Stay tuned for updates!