FCA to pull the plug on Fiat brand this year to focus entirely on Jeep.
01 Feb 2019 | 6190 Views | By Hormazd Sorabjee
At the 2017 Geneva motor show, the late Sergio Marchionne, in his forthright fashion, told Autocar India: “Fiat has had many chances in India and now its Jeep’s turn.” The former Fiat-Chrysler boss couldn’t have made it more obvious that he had given up hope for Fiat in India ...
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At the 2017 Geneva motor show, the late Sergio Marchionne, in his forthright fashion, told Autocar India: “Fiat has had many chances in India and now its Jeep’s turn.” The former Fiat-Chrysler boss couldn’t have made it more obvious that he had given up hope for Fiat in India and it was only a matter of time before the company would pull the plug on the Italian brand.
Our sister publication Autocar India had reported FCA's plan to discontinue the Fiat brand in India in its July 2017 issue.
That time has come. Fiat’s current product portfolio, which currently only consists of the Linea and Grande Punto (and the latter's hotter and crossover derivatives), will not comply with the upcoming stricter safety and emission regulations. There has been minimal investment in both these ageing products, which have been on sale for around a decade. Hence, investing in upgrading the Linea and Grand Punto, which are well beyond their lifecycle and whose combined sales were just 101 units in 12 months (from December 2017-November 2018), would be pointless.
Yet another blow will for both these models will be the disappearance of Fiat as a major diesel engine supplier when the BS-VI emission regulations come into effect in April 2020. Fiat’s last remaining customers – Maruti Suzuki and Tata Motors – will by then completely switch over from the ubiquitous 1.3 Multijet diesel, to their own in-house powertrains. Fiat alone simply does not have the scale to bear the costs of making its engines BS-VI emission compliant and will have no choice but to axe it.
To revive the Fiat brand would require nothing short of replacing Fiat’s ageing product line-up with an all-new model range and new engine family. This would require an outlay of at least $600 million (around Rs 4,300 crore), which would be impossible to get any semblance of return on investment given Fiat’s weak position in the market.
So when faced with the same ‘invest or perish’ dilemma as other manufacturers on the eve of this stricter regulatory era, the choice for FCA is pretty straightforward. The Linea and Grand Punto are simply not worth upgrading beyond October 2019, when it becomes mandatory to have crash test compliance. In fact, dealers are being asked by FCA to quickly sell off cars without ABS to beat the April 1, 2019 deadline, after which ABS on all cars becomes compulsory.
Yes, FCA will once and for all shut down the Fiat brand, which has been a household name in India for generations. It’s the end of an era.