China double digit growth offsets weak demand for Fiat India in APAC region
Fiat Group 2013 Q1 results show that global shipments are at par with last years numbers standing at above 1 million. However, YOY revenues of €19.8 billion stand at 2% decline. Trading profit for 2013 Q1 stood at €618 million as compared to €806 million for Q1 2012, and net profit accounted for €31 million as compared to €262 million for Q1 2012. Net industrial debt increased to €7.1 billion when compared to €6.5 billion at 2012 year end.
Of the major business regions including LATAM, NAFTA, and EMEA, APAC vehicle shipments (excluding JVs) stood at about 32,000 units for Q1 2013, and increase of 28% when compared to last year. Demand in the region was higher than Q1 2012 fuelled by growth in China and Australia. In the region, India, Japan, and South Korea demand was lowered in comparison to last year. Double-digit growth in China went on to offest weak demand in India and Japan.
In increasing it’s footprint, Fiat Group will introduce the Jeep brand in India this year. Fiat India will be introducing Jeep and Abarth cars to make an entry in the luxury market here. Punto and Linea facelift launches are scheduled for later this year. A Punto based crossover would be introduced in 2014. 2013 Grand Cherokee, and Jeep Wranger launches are scheduled for thsi year.
APAC revenues totaled €968 million, an increase of 36% over Q1 2012 (+38% at constant exchange rates). Trading profit in APAC stood at €100 million, which stood at €23 million over last year. Fiat Group’s expansion in the region is supported by volume increases balancing higher sales and marketing costs.
In their quest to reach out to India yet again, Fiat has introduced a new marketing campaign that is of the call to action type. The company is intent on increasing market share after parting ways from Tata Motors on the sales front. New campaigns have been launched which will draw attention to new initiatives in respect to enhanced dealerships, better after sales service facilities, and to project the brand in a new light.
To reestablish the brand in the Indian market, they are altering their approach, concentrating on brand, product and distribution. Currently, with a total of 57 dealerships across the country, they hope to increase this twofold by the end of this financial year. Independent dealer networks and state of the art service workshops are being planned in primary locations pan India with an aim to significantly claw their way back to some market share, if at all.
The ongoing ‘Make the Move’ campaign has been conceptualized by Ogilvy India and is being presented by Maxus India. The TVC is scouting for optimum exposure with the IPL being in focus now. India is the only country where the company operates 2 Fiat Caffes (Pune and Delhi), in collaboration with Lavazza, coffee retail giants with an aim to showcasing their offerings in an informal setting that brings Italy and the company’s ideology to the fore. In Q1 2013, Fiat India sold approximately 1000 cars here accounting for a decimal point market share. Fiat hopes to end the year at 1% market share here and that would be difficult this year, with sales declines being the flavor of the season for most automakers. The upside is, if Fiat makes the move well, they could go on to recapture a small segment in The Indian auto industry.