Fiat-Tata breakup: What this means for you

Tata and Fiat are on the verge of ending a sales and marketing relationship that was signed in 2006, for Tata to sell, distribute and service Fiat cars in India. Fiat India earlier this year decided to open its independent sales and service outlets.

Fiat is planning to open between 80 and 100 independent dealerships and service outlets in 35 Indian cities in the next 12 months. The company also plans to achieve a 5% market share from the present under 1% share. Sales of Fiat cars have been sinking, with the company selling just 207 Puntos and 63 Lineas last month, a far cry from what others in these segments are selling. Even luxury cars such as Mercedes and BMW are selling more cars than Fiat a month!

The problem with Fiat is that buyers are wary of the service they receive. Many have complained that even in the showrooms when they have gone to inspect a Fiat car, the showroom staff have often tactfully diverted them to a Vista or Manza (which incidentally use Fiat engines – a major area where Tata has benefited in this alliance). Also read: Upcoming Fiat Punto spy shots

However, now Fiat is making a break for it and wants to get aggressive in the Indian market – with four new products planned in the next two years. This includes a facelift for the Fiat Linea next year, followed by a new Fiat Punto, an all-new Linea (with the current Linea becoming the Linea Classic) and a compact MPV based on the Punto platform that will compete with the Maruti Ertiga. The company may also consider launching a small car to compete with the Maruti Alto and Hyundai Eon.

Fiat also has a tie-up with Chrysler, under which it will be introducing four products under the Jeep brand. Also read: Jeep to enter India with Cherokee and Wrangler

How does this impact you?

But for you as a consumer, what does this mean? If you already own a Fiat car, here’s how this new alliance will affect you.

By next year, you will not be able to service your Linea or your Punto at a Tata service centre. You will have to look for an independent Fiat service centre to service your car. If you have recently bought a car through a Tata-Fiat dealership, all warranty claims and other work will now need to be claimed only from Fiat, although it is unclear if existing dealerships may continue to honour the warranty and service cars until the warranty expires.

If you are a fan of the Fiat brand and want to buy a Fiat product, this is a good time to do so, because the company is committed to expanding in India, and the Linea and Punto are being offered with good discounts. However, you won’t get service at all locations in India, and Fiat goes back to being a niche brand, with only select number of service outlets – quite like a Nissan or Renault. Factor this in, when you make your purchase decision.