CHAPTER-1

Introduction to Marketing Strategy

Marketing strategy is a long-term course of action designed to optimize allocation of the scarce
resources at the disposal of a firm in delivering superior customer experiences and promote the
interests of other stakeholders. Scarce resources include monetary capital, human capital,
technology, time. Confused about the difference between that and your marketing plan,
marketing mix, business goals, etc?
Bottom line: think of the definition of marketing strategy as the high-level rules that direct your
marketing activities. For example, if theres a single influencer who touches all your customers
and has a significant impact on the way those customers try to solve their problem... one of your
strategies may be to focus on building a strong relationship with that influential individual or
company.
Your marketing
strategy is the way
you make sure
youre getting the
maximum impact
from your limited
marketing budget
and time.
The picture on the
right is the
simplest way to
think about it,
starting at the bottom:

Start with your business goals: these are the highest-level objectives of the business, or
mission statement.

Next comes the marketing strategy: the high-level rules that will govern what marketing
efforts you focus on.

After youve defined your marketing strategy, you will define the marketing mix: plans
for Product, Pricing, Place (Distribution), and Promotion.

Then the final step is writing a marketing plan, which will describe the specific, detailed
marketing activities that you plan on engaging in to achieve the marketing strategies and
business goals.

Your first step in developing a marketing strategy that drives significant business results is to
make sure you fully understand your market by doing some research: market size and growth,
competitors, complementary, and customers.

Objective of study

To explore brand Position of Fiat.

To study the marketing strategies of Fiat.

To explore marketing mix of Fiat.

To study the branding strategies of Fiat.

To explain the products and services provided by Fiat.

CHAPTER-2
3

Research Methodology
Sources of Data: Data Source, as the name implies provides data via data site. Data site in
turn stores an organization's database, data files including non-automated data. Companies
implement a data warehouse because they want a repository of all enterprise related data as well
as a main repository of the business organization's historical data.

Primary Data Collection

Secondary Data Collection

Def.: Primary data are original first hand data

collected by the researcher through surveys,

Def.: Secondary data are published by some

interviews, observation & experimentation.

outside agency like trade journal for research

Questionnaires are used for the collection of

purpose. Such data already exist somewhere

primary data. Such data are more valuable as

having being collected for some other purpose.

the data are fresh, reliable & tailor-made.

Primary data will be collected from-

Secondary data will be collected from1. Books, journals & internet sites.

1. Customers feedback by questionnaire.

Questionnaire: List of a research or survey questions asked to respondents, and designed to

extract specific information. It serves four basic purposes: to (1) collect the appropriate data, (2)
make data comparable and amenable to analysis, (3) minimize bias in formulating and asking
question, and (4) to make questions engaging and varied.

Books: A series of little printed signs--essentially only that. It is for the reader to supply himself
the forms and colors and sentiments to which these signs correspond. It will depend on him
whether the book be dull or brilliant, hot with passion or cold as ice. Or, if you prefer to put it
otherwise, each word in a book is a magic finger that sets a fiber of our brain vibrating like a
harp-string, and so evokes a note from the sounding- board of our soul. No matter how skillful,
how inspired, the artist's hand; the sound it wakes depends on the quality of the strings within
ourselves."

CHAPTER -3

Conceptual framework
History of Automobile Industry

The automobile history dates back to the late 18th century. Nicolas Joseph Cugnot, a French
engineer is credited with inventing the first self-propelled automobile.

Cugnot's vehicle used steam power for locomotion. The vehicle found military application in the
French army. Cugnot's automobile was never commercially sold.
In the beginning automobile industry was dominated by steam-powered vehicles. The vehicles
were expensive and difficult to maintain. The incidence of frequent boiler explosions also kept
potential purchasers away. Commercial history of automobiles started with the invention of
gasoline powered internal combustion engines. The German inventor, Karl Benz constructed his
first gasoline powered vehicle in 1885 at Mannheim, Germany. Commercial production of Benz
cars started in 1888. Panhard et Levassor of France was the first company to exclusively build
and sell motor cars from 1889.
The early 1900s saw many automobile manufacturing companies coming into existence in a
number of European countries and the United States. The first mass produced automobile in the
United States was the curved-dash Oldsmobile. It was a three-horsepower machine and sold
5,000 units by 1904. The economics of the US car market was disrupted by the arrival of Henry
Ford and his Model T car. The Model T was the world's first mass produced vehicle- a million
units were sold by 1920- a space of 10 years.
The History of the automobile actually began about 4,000 years ago when the first wheel was
used for transportation in India. Several Italians recorded designs for wind-driven cars. The first
was Guido da Vigevano in 1335. It was a windmill-type drive to gears and thus to wheels.
Vaturio designed a similar car that was also never built. Later Leonardo da Vinci designed

clockwork-driven tricycle with tiller steering and a differential mechanism between the rear
wheels.
In the early 15th century, the Portuguese arrived in China and the interaction of the two cultures
led to a variety of new technologies, including the creation of a wheel that turned under its own
power. By the 1600s, small steam-powered engine models were developed, but it was another
century before a full-sized engine-powered automobile was created.
A Catholic priest named Father Ferdinan Verbiest is credited to have built a steam-powered car
for the Chinese Emperor Chien Lung in about 1678. There is no information about the
automobile, only the event. Since James Watt didn't invent the steam engine until 1705, we can
guess that this was possibly a model automobile powered by a mechanism like Hero's steam
engine-a spinning wheel with jets on the periphery.
Although by the mid-15th century the idea of a self-propelled automobile had been put into
practice with the development of experimental car is powered by means of springs, clockworks,
and the wind, Nicolas-Joseph Cugnot of France is considered to have built the first true
automobile in 1769. Designed by Cugnot and constructed by M. Brezin, it is also the first
automobile to move under its own power for which there is a record. Cugnot's three-wheeled
steam-powered automobile carried four persons and was meant to move artillery pieces. It had a
top speed of a little more than 3.2 km/h (2 mph) and had to stop every 20 minutes to build up a
fresh head of steam.

the poor steam automobile gradually out of use on roads. The early steam-powered automobile s
were so heavy that they were only practical on a perfectly flat surface as strong as iron. A road
thus made out of iron rails became the norm for the next hundred and twenty-five years. The
automobile s got bigger and heavier and more powerful and as such they were eventually capable
of pulling a train of many car s filled with freight and passengers.
Carl Benz and Gotttlieb Daimler, both Germans, share the credit of changing the transport habits
of the world, for their efforts laid the foundation of the great motor industry as we know it today.
7

First, Carl Benz invented the petrol engine in 1885 and a year later Daimler made a car driven by
motor of his own design and the rest is History.
Daimler's engine proved to be a great success mainly because of its less weight that could deliver
1000 rpm and needed only very small and light vehicles to carry them.
France too had joined the motoring scenario by 1890 when two Frenchmen Panhard and
Levassor began producing automobile s powered by Daimler engine, and Daimler himself,
possessed by the automobile spirit, went on adding new features to his engine. He built the first
V-Twin engine with a glowing platinum tube to explode the cylinder gas-the very earliest form of
sparking plug. The engines were positioned under the seat in most of the Daimler as well as Benz
car s. However, the French duo of Panhard and Levass or made a revolutionary contribution
when they mounted the engine in the front of the car under a 'bonnet'.
Charles Duryea built a car carriage in America with petrol engine in 1892, followed by Elwood
Haynes in 1894, thus paving the way for motor car s in that country.
For many years after the introduction of automobile s, three kinds of power sources were in
common use: steam engines, gasoline or petrol engines, and electrical motors. In 1900, over
2,300 automobile s were registered in New York, Boston, Massachusetts, and Chicago. Of these,
1,170 were steam car s, 800 were electric car s, and only 400 were gasoline car s.
In ten years from the invention of the petrol engine, the motor car had evolved itself into
amazing designs and shapes. By 1898, there were 50 automobile -manufacturing companies in
the United States, a number that rose to 241 by 1908. In that year, Henry Ford revolutionized the
manufacture of automobile s with his assembly-line style of production and brought out the
Model T, a car that was inexpensive, versatile, and easy to maintain. The introduction of the
Model T transformed the automobile from a plaything of the rich to an item that even people of
modest income could afford; by the late 1920s the car was commonplace in modern industrial
nations.
erbert Austin and William Morris, two different car makers, introduced mass production methods
of assembly in the UK, thus paving the way for a revolution in the automobile industry. Austin
8

Seven was the world's first practical four-seater 'baby car ' which brought the pleasures of
motoring to many thousands of people who could not buy a larger, more expensive car . Even the
'bull-nose' Morris with front mounted engine became the well-loved model and one of the most
popular car s in the 1920s.
Automobile manufacturers in the 1930s and 1940s refined and improved on the principles of
Ford and other pioneers. car s were generally large, and many were still extremely expensive and
luxurious; many of the most collectible car s date from this time. The increased affluence of the
United States after World War II led to the development of large, petrol-consuming car s, while
most companies in Europe made smaller, more fuel-efficient car s. Since the mid-1970s, the
rising cost of fuel has increased the demand for this smaller car s, many of which have been
produced in Japan as well as in Europe and the United States.

he History of motor car s has surely been a well-traversed one. The automobile, as it progressed,
was a product of many hands, of revolutionary concepts, and of simple, almost unnoticed
upgrading. In the end, the one who received the most for these challenges and changes was the
motorist, whose interest, money, and enthusiasm have forced the auto-moguls to upgrade,
perfect, and add to previous achievements in order to stay in the competition.

Brand Fiat
"Fiat Professional" is the new brand name for Fiat Light Commercial Vehicles.
02-05-2007 - "Fiat Professional" is the new brand name for Fiat Light Commercial Vehicles

"Fiat Light Commercial Vehicles" is set to change name and logo, with the new brand name "Fiat
Professional". The new logo is a combination of the Fiat logo and the word "Professional",
which underlines both the brand's identity as a part of Fiat Group Automobiles and its clearly
international vocation.

The word "Professional" highlights the brand's aspiration to give the image independent status,
while at the same time accentuating its ability to respond to the needs of professional clients. The
best proof of this is the fact that it has represented a day to day ally in the working world for over
a century, with a role in the economic and social development of many countries
This professional expertise is based on four key values: the capability that comes with direct
experience on all levels, from the project manager to the mechanic who services the vehicles; the
sales figures from the various markets, thanks to the brand's range of successful products; the
fruitful, stable relationship that has been forged between the company and the demanding
professionals of the transport sector, and lastly, the innovation that characterizes the vehicles
themselves - always one step ahead of changes in and demands of the market.

To take a closer look, in the new logo, designed by Robilant Association (an agency specialized
in Brand Consulting and Strategic Design), the word professional appears in ruby red on a grey
stripe that recalls the metallic strip used to customize the exterior of dealerships. And this sales
network represents a strategic asset for "Fiat Professional": there are 1400 dealers in Europe
selling Fiat light commercial vehicles, and more than 700 of these are specialized, working to
strict standards regarding the display of new and used vehicles, with workshops specialized in
maintenance and repairs, and qualified sales personnel with specific training.

10

Fiat Cars
Fiat offers 1 new car models in Luxury segment, 1 in Midsize segment, 1 in Small segment in
India. Choose a Fiat car to know prices, features, reviews and photos.
Car Model

Avg Ex-Showroom Price

Rs. 4,41,198
Fiat Grande Punto

Rs. 6,59,325
Fiat Linea

Rs. 14,92,867
Fiat 500 .

11

Car Industry

The Indian automotive industry is the 2nd fastest growing in the world. About 8 million vehicles
are produced annually in this country today. During 2005-2006, India has emerged as the 3 rd
largest market in the Asia Pacific Region. With various car manufacturing companies setting up
their units in different parts of the country, the production of the cars will increase at a very fast
rate. The car reports indicate that India will soon become one of the top 10 car manufacturing
countries , leaving behind the U.K. Car statistics also show that by the end of the fiscal year
2006-2007, the car production capacity in India will exceed the mark of 2 million. Thus, the
production of cars will increase by 70% from the present capacity of 1.2 million.
The Indian automotive industry is the 2nd fastest growing in the world. About 8 million vehicles
are produced annually in this country today. During 2005-2006, India has emerged as the 3 rd
largest market in the Asia Pacific Region.
With various car manufacturing companies setting up their units in different parts of the country,
the production of the cars will increase at a very fast rate. The car statistics indicate that India
will soon become one of the top 10 car manufacturing countries , leaving behind the U.K. Car
statistics also show that by the end of the fiscal year 2006-2007, the car production capacity in
India will exceed the mark of 2 million. Thus, the production of cars will increase by 70% from
the present capacity of 1.2 million.
The domestic sale of passenger cars has increased significantly over the years. A graphical
representation of the domestic sale of cars will give you an insight about the present market
situation prevailing in the country:
In the recent years, India has emerged as one of the major bases for manufacturing small
passenger cars. At In the recent years, India has emerged as one of the major bases for
manufacturing small passenger cars. At present the Indian automotive industry boasts of being
the 3 rd largest manufacturer of small cars. According to the car statistics almost 70 % of the cars
sold in this country come under the segment of small cars. A number of car manufacturers like:
12

Maruti Udyog, Tata Motors, Hyundai, Honda, Ford, Hindustan Motors, Fiat, General Motors etc
offer various new model of cars now and then. It is expected that the various automobile
manufacturers will be investing about $ 5 billion in India, between 2005-2010.
Some important statistics about cars also include car insurance statistics, auto insurance statistics,
auto accident statistics and car crash statistics. All these data and statistics help in framing the
state policies and issuing the guidelines to different auto manufacturers and dealers. As per the
car reports , export of passenger cars from India have also grown considerably over the last
decade. A graphical representation of car export trend will help you to make an in-depth analysis
of the present status of the Indian automotive industry:
With new strategies being implemented and more investments being made in Indian automotive
industry the production as well as the domestic sale and exports will increase substantially.

13

Types of cars

Cars: 4-Door Sedans - 2-Door Coupes - Station Wagons - Convertibles - Sports Cars Minivans
Hatchbacks.
4-Door Sedans - Sedans are a good choice for most automobile shoppers. The enclosed trunk
offers security, while the rear doors allow easy entry for rear-seat passengers. Most luxury
vehicles are four-door sedans because they're more comfortable than most other body styles. The
smallest available in the US are sub-compact sedans like the Hyundai Accent and Chevrolet
Metro. Slightly larger are compact models like the Honda Civic and Ford Focus. Mid-size sedans
include the Honda Accord, Toyota Camry, Ford Taurus, and Chevrolet Lumina, while the Ford
Crown Victoria and Buick LeSabre are considered large sedans. Automotive marketers have
created a new "near-luxury" sedan category, meaning any new sedan priced between $30,000 and
$40,000, while the traditional luxury sedan costs over $40,000 when new. Near-luxury sedans are
usually mid-sized; luxury sedans are usually large, though there are a few exceptions to the size
and price limitations.
2-Door Coupes - Coupes are usually driven by single adults or childless couples. Many of them
have a hatchback instead of a trunk, to allow large items to be carried for short distances. The
rear seats are difficult to access, as the front doors must be used.
Station Wagons - An active family will want to look at minivans, sport utility vehicles, or station
wagons. In the rest of the world, station wagons remain the first choice for active families. In
North America, first minivans and now SUVs have grabbed most of the station wagon's customer
base. I have to admit that many minivans now drive and handle much like the wagons they've
replaced, but I don't understand the increasing popularity of large SUV's. They're twice as big as
they need to be, but seat fewer people than a minivan; they get horrible gas mileage, and their
truck-like ride and handling are rough. You'll pay substantially more to insure an SUV than a
comparable automobile as a direct result of their poor handling. Many inexperienced drivers find
out the hard way that SUVs don't corner like automobiles. I strongly suggest SUV shoppers
reconsider and take another look at the station wagon. Station wagons offer more stability, better
14

gas mileage, lower insurance rates, and SUV-sized interiors. You won't lose your all-wheel drive
either, as Subaru, Volkswagen, Audi, Volvo, and Mercedes-Benz offer all-wheel drive on all of
their wagons.
Convertibles - Most convertibles are sports cars, meaning two seats, high-performance engines
and superior handling. However, GM, Ford, Mitsubishi, and Chrysler offer a few "normal"
convertibles, i.e. regular production coupes with four seats and convertible tops, such as the
Chevrolet Cavalier, Pontiac Sunfire, Ford Mustang, Dodge Avenger, Chrysler Conquest and
Mitsubishi Eclipse Spyder. Luxury convertibles are available from BMW, Mercedes-Benz, Saab,
and Volvo. Convertibles are great when the weather's perfect, but their drawbacks are obvious.
Sports Cars - Sports cars were originally European two-seat roadsters designed for both daily
travel and week-end racing hobbyists. A few 1950's manufacturers (notably Jaguar and AlfaRomeo) put permanent tops on their roadsters, resulting in the sports coupe. The term sportssedan is a more recent term to describe a four-door vehicle that handles like a sports coupe or
roadster. Recently we've seen luxury cars advertised as luxury sports sedans. Porsche, selling
traditional sports cars in this country since the 1950's, until recently had as its only competition
the Chevrolet Corvette. 1990 marked the return of the affordable sports car in this country, when
Mazda offered its MX-5 (Miata) for under $20,000 dollars, and the incredible demand for it
prompted other companies to follow suit. BMW, Mercedes-Benz, Mitsubishi, and Porsche all
introduced roadsters for under $40,000 in the latter part of the 1990's. At the same time, Dodge
dealers begged Chrysler to produce a 1993 concept car to give the Corvette a run for the money.
The Dodge Viper and Plymouth Prowler remain a success story for Chrysler, with this year's
production already sold out. Sports cars are cool and fun to drive, though impractical for daily
transportation. You'll need a garage to store them in, and a second mortgage to pay for their
insurance. But if you've got money to burn, go for it!.
Minivans-These mid-sized cars provide ample space for passengers, as well as cargo
transportation. There is a large variety when it comes to minivans. Some of these multi-utility
vehicles (MUVs) are four wheel drives, while some offer seats which can be folded as to convert
the passenger car to a utility vehicle. The popular minivan models available today include Dodge
Grand Caravan, Volkswagen Routan and Kia Carnival.
15

Hatchbacks-The USP of hatchbacks is the ample cargo space and a large door to tuck in all your
luggage. The cargo space of these medium-sized cars is accessible from the rear seat, as opposed
to the separate trunk in sedans. Some of the most popular hatchback models include Audi S3,
Geo Metro and Dodge Caliber.

16

CHAPTER-4
Introduction to Automobile Industry

A much battered automobile industry enjoyed a significant rebound in 2010 through the fall of
2011a sharp and welcome contrast to its state during 2008 and 2009. In the U.S. and around
the world, the recession that started near the end of 2007 had a profound impact on the
automobile industry. Americas car and light truck market dropped dramatically in 2008, to
approximately 13.2 million units sold for the year, down by about 2.9 million from the number of
units sold in 2007. In 2009, the market was much worse, with sales for the year totaling 10.4
million units. About 690,000 of those sales were made with the stimulus of a cash for clunkers
program paid for with federal dollars. This was easily the worst year in decades for the car
business, with two giant manufacturers filing for bankruptcy, GM and Chrysler, while a large
number of dealerships, suppliers, parts manufacturers and other auto-related businesses also
failed. By 2011, Chrysler was 50% owned by Italian car maker Fiat, thanks to agreements and
financing that had enabled Chrysler to exit bankruptcy. GM was 61% owned by the U.S. federal
government.
Estimates of the worldwide automobile market vary substantially from one source to another.
Scotiabank Group estimated that 60.13 million new cars and light trucks would be sold globally
during 2011, up from 53.96 million in 2010 and only 50.50 million during 2009. As of mid2011, Scotiabanks analysts found that sales were growing at particularly rapid rates in emerging
nations such as India (with 2 million units sold forecast for 2011, doubling since 2006), Brazil,
Chile and Russia. Brazil, enjoying exceptional economic growth, may become the worlds thirdlargest car market by 2016 or so, surpassing Germany, and topped only by China and the U.S.
U.S. car and light truck sales will total from 12.2 to 13.0 million units for 2011 provided the
economy does not slow significantly during the final quarter of the year. This would represent
good growth from 11.55 million units during 2010.

17

The biggest upward trend in auto sales has been in China, where government stimulus helped
dealers to sell about 13.6 million units in 2009 and an estimated 14 million in 2010. While
estimates of its annual unit sales vary widely, China has clearly become the worlds largest car
market. The China Association of Automobile Manufacturers states that its members
manufactured 18 million units during 2010, some of which were for export. Many observers
expect Chinas market to grow to 20 to 25 million units yearly over the mid term. However,
Chinas government has a great deal of control over the market, as it may increase sales by
encouraging new auto loans, or decrease sales by adding new registration fees or restricting
traffic in major cities in order to reduce congestion and pollution.
One of the biggest winners in todays highly competitive automobile market has been Korea,
where Hyundai, along with its brand Kia, have enjoyed soaring global sales. Consumers are
attracted to their reasonable prices, excellent warranties and world class manufacturing quality.
Korean car makers are competing aggressively against the worlds largest firms. Hyundais sales
soared to 5.74 million units worldwide during 2010, placing it 4 th below Toyota, GM and
Volkswagen.
Approximate Global Unit Sales by Top Auto Manufacturers 2010, in millions
Toyota

8.4

General Motors (GM)

8.3

Volkswagen

7.1

Hyundai

5.7

Ford

5.3

Nissan

4.0

Peugeot

3.6

Honda

3.5

There are approximately 250 million vehicles in operation in the United States. Around the
world, there were about 1 billion cars and light trucks on the road in 2010.

18

The years of 2004 through 2006 will long be remembered as a pivotal period in the automobile
industry. It was a time during which high gasoline prices finally created significant demand
among U.S. consumers for fuel-efficient vehicles. Gasoline prices that rose to approximately
$2.00 per gallon started taking a huge bite out of family budgets in 2004, and many middle-class
consumers who owned fuel guzzling SUVs and pickup trucks began to wish they had vehicles
that were much less expensive to operate. By 2005-06, with gasoline prices in the $3.00 range,
the party was over for large SUVs and family trucks.
All major car makers are aggressively pushing their smaller, high efficiency vehicles. GM is
betting heavily on its Chevrolet Cruze, a small sedan capable of 36 mpg on the highway and
stuffed with convenience features that consumers will appreciate. Fords revamped Fusion
earned rave reviews, and it comes in either a hybrid model or a standard engine version that gets
31 mpg on the highway. Chrysler will be relying heavily on its relationship with Fiat for new,
fuel efficient models. Honda, Volkswagen, Toyota, Hyundai, Nissan and Peugeot all have
invested in new, advanced small cars. Luxury brands like BMW, Mercedes and Audi each have
relatively small cars on the market and will soon offer a wide range of very fuel efficient designs.
One result of high gasoline costs and frugal consumers has been strong demand for Toyotas
Prius gasoline-electric hybrid car. The company has made investments that enable it to
manufacture hybrid versions of many of its popular models, including the Camry and several
versions of the Lexus. Hybrids are now available from a wide variety of makers, and technology
has steadily improved.
One of the most important trends is the introduction of plug-in hybrids (PHEVs) and electric
vehicles such as GMs Volt, which debuted in very low production volume as a 2011 model.
This car includes a gasoline-powered engine capable of charging its batteries for those occasions
when it is not convenient to plug in and also provides a boost to acceleration when needed.
Tremendous improvements in battery technology will soon come to market, further enhancing
this trend. Nissan offers strong competition in the electric vehicle sector, with the launch of its
2011 all-electric model called Leaf, initially in very low volume. However, the very high prices
and limited range of batteries will cause many consumers to stay away from electric cars. This
market is likely to begin rapid growth when advanced batteries become available at lower cost,
19

which may take until 2020 or so. Many of the worlds top research organizations are working
steadily on this challenge. oath consumers and emissions regulators are taking a renewed interest
in advanced automobile technologies. Clean diesel engines, like those offered in new cars from
BMW, Volkswagen and Mercedes-Benz, offer exceptional performance and fuel economy while
providing quiet, vibration-free running similar to that found in gasoline-powered cars. Clean
diesel offers a particularly attractive alternative to hybrid technology for those who seek fuel
efficiency, and it is already widely used in passenger vehicles in Europe. Meanwhile, the use of
ethanol as a gasoline additive in America has grown rapidly, regardless of whether it makes any
environmental or economic sense, thanks to requirements enacted by Congress, backed up by
massive government subsidies.Consumers are keenly interested in quality and serviceability in
the cars that they acquire. A stumble in this regard can have devastating consequences for a car
maker, as seen in Toyotas recent quality problems that led to slow sales, massive recalls and a
humble apology from the firms leader.
The rising affluence of consumers in China is creating both huge opportunities and huge
problems. China has become the worlds largest user of energy overall and one of the worlds
largest importers of petroleum products, largely to fuel its burgeoning fleet of cars and trucks.
Streets and highways are clogged with cars, to the extent that traffic and smog are nightmarish.
Automakers from abroad have raced to establish plants and partnerships in China, with the aim
of producing cars both for domestic use and for export. In fact, low labor costs and increasing
product quality in China threaten auto plants located in high cost nations such as the U.S. Today,
strong markets have emerged there for everything from inexpensive sedans and vans to Cadillacs
and German luxury cars.

20

CHAPTER-5
Company Profile
Fiat
Fiat an Italian automobile and engine manufacturing company was established in the year 1899
by Giovanni Agnelli and others. Fiat is an industrial group based in Turin in the Piedmont region.
Fiat is one of the six biggest car manufacturers in Europe and dominates the Italian market. The
Fiat Company controls nearly all Italian car brands such as Lancia, Alfa Romeo, Ferrari and
Maserati. Fiat Company also manufactures rail-road vehicles, aircrafts and tanks. In the year
2009, the Fiat Company (not including Chrysler) was ranked ninth largest car-maker in the world
and termed Italy's largest manufacturer. Initially, out of every four cars on the streets of Italy,
three were Fiat. The decline started from 1970's due to an increase in free trade within the
European Union. The market share dropped to 32 per cent in the year 2008 when the Korean and
Japanese cars came into the domestic market. In Western Europe, Fiat's share dropped from 13.8
per cent in 1990 to 8.3 per cent in the year 2008. The Fiat Company is essentially an Italian and a
European brand but is also doing well in Latin America. Furthermore, the company has made its
presence felt in almost all parts of the world. Fiat is an acronym for Fabbrica Italiana Automobile
Torino (Factory Italian Automobile Turin), one of the ancient car manufacturers surviving today.
About twenty-four Fiat car models rolled out including 3/12 HP in the year 1900 with the
opening of the company's first factory.
Fiat History
As per Fiat company information, its history began many years ago at the dawn of the Italian
Industrialization in which the Fiat Company has played a leading role. The Fiat Company was
founded on 11th July in the year 1899 in Turin, Italy by a group of investors. Among the board of
directors of Fiat Company, Giovanni Agnelli stood out in the group of investors and was
recognized for his 'strategic vision' and 'determination'. In the year 1902, he was made the
managing director of the company. The Fiat company history shows that the first manufacturing
unit of Fiat Company was opened in the year 1900 in Corso Dante. The first factory of the Fiat
21

company employed 150 workers and produced 24 cars among which were the 3/12 HP cars not
yet fitted with reverse gear. The logo of the Fiat Company was adopted in the year 1904 which
was an oval on a blue background and was designed by Biscaretti. First car tour of Italy
witnessed nine cars of Fiat Company arriving at finish line. In the year 1902, a 24 HP Fiat car
was driven by Vincenzo Lancia, who won the first real competition, Sassi-Superga uphill race.
Giovanni Agnelli also set a record in a second tour of Italy in an 8 HP Fiat car. The company
decided to expand the Fiat company cars outside Europe and hence in 1908 the company opened
Fiat Automobile Co. in the United States of America. United States was chosen as it was a
promising market, ensuring fair returns. In the year 1934 and 1936, two Fiat Company Cars
were launched, known as 'Balilla' later known as 'Tariffa minima' and 'Topolino'. Balilla was
known for its low fuel consumption and Topolino was the smallest utilitarian car in the world,
which was in production until 1955. In the year 1937, the Fiat Company started constructing the
great Mirafiori plant which proposed advanced principles of industrial organizations and ensured
mass production. During the second world war there was a reduction in the production of cars
while the manufacturing of commercial vehicles increased. Giovanni Agnelli died in 1945 and
from then, the company was headed by Vittorio Valletta.
Fiat Founder
Fiat company was founded by a group of people including Giovanni Agnelli. Giovanni Agnelli
stood out amongst the group of investors because of his vision and innovative ideas. He was born
in Villar Perosa, a small town near Pinerolo, Piedmont. His father was the Mayor of Villar Perosa
and he died at the age of 40. Giovanni Agnelli following his father's footsteps became the Mayor
in the year 1895 which he continued to be, until his death. Agnelli used his engineering and
entrepreneurial skills in the invention of new horseless carriage. In the year 1898, Agnelli met
Count Emanuele Bricherasio di Cacherano of Turin, who was on the lookout for investors for his
horseless carriage project. On 1 July 1899, Agnelli was amongst the founding members of the
Fabbrica Italiana di Automobile Torino which later became Fiat. In the year 1899, he bought a
share of 400 dollars which is worth billions today. In 1902, he became the managing director of
the new company and became the chairman in the year 1920.

22

Fiat in India
Fiat company in India was a joint venture with the Tata Motors, incorporated on 2 January, in the
year 1997. The Fiat Company employed about 600 employees and is based in Ranjangaon, Pune,
in the district of Maharashtra. Agreement for joint Venture was finally signed between TATA and
Fiat on 19 October in 2007. The joint venture between Fiat and TATA comprises of a 50-50
partnership. Board of Directors of Fiat Company in India consists of five nominees each from
Fiat and TATA. Before the joint venture, Fiat Company in India sold models like 1100, 124 and
Uno which were produced by Premier Automobiles Limited. The manufacturing unit based in
Pune is capable of producing 100,000 cars and 200,000 engines, besides components and
aggregates. The company plans to double the production of cars and engines within next few
years. This production unit currently manufactures the Palio Stile 1.1 and 1.6 models, Grande
Punto and Linea. Furthermore, the Fiat Company will also manufacture the 1.3 litre Multijet
diesel engines and 1.2 & 1.4 litre fire gasoline engines. Besides Fiat cars, this facility also
produces Tata passenger and next generation cars with the investment that exceeds 650 million
Euros. The manufacturing unit of Pune is expected to provide direct and indirect employment to
more than 4000 people. TATA motors, the other company in the joint venture, is the largest
automobile company in India. The revenues of the company were estimated at Rs. 32,426 crores,
during 2006-2007. Tata Motors has proved to be a leader in manufacturing commercial vehicles
and is the second largest in producing passenger vehicles. Tata Motors is the fifth largest heavy
and medium commercial vehicles producer in the world and the second largest heavy and
medium bus manufacturer.
Fiat Manufacturing Facilities
Fiat Company (not including Chrysler) is one of the largest car makers in the world as well as the
largest car manufacturer of Italy. The cars of the Fiat Company are produced around the world
and are the most popular in Brazil. Joint ventures between Fiat Company and other companies
can be found in many countries like Italy, France, Turkey, India, Pakistan, China, Serbia and
Russia. Fiat Company started production of Linea at its Ranjangaon Plant which is based in
Pune, a district of Maharashtra. The production of this model was started from 21st November
2008. The production of Linea signified the progress of Fiat's stability in Indian car market
23

which is in a joint venture with TATA motors Limited. The manufacturing unit of Fiat Company
is setup in a sprawling area of 200 acres, equipped with body shop, paint shop and assembly line
to be commissioned presently and the Power train plant. Linea was launched internationally in
the month of May in 2007 in Istanbul and thereafter it met with great success.
Current Car Models
The Fiat Company in India currently offers about four variants in Indian market. These include a
range of Fiat Grande Punto, Fiat Linea, Fiat Palio Stile, and Fiat Palio Stile Multijet. Some of the
mentioned models are manufactured in the company's plant which is based in Ranjangaon in
Pune and others are imported. The Fiat Grande Punto is offered in the market with nine variants.
They are Fiat Grande Punto 1.2 Fire Active, Fiat Grande Punto 1.4 Dynamic, Fiat Grande Punto
1.3 M. Jet Active, Fiat Grande Punto 1.4 Emotion, Fiat Grande Punto 1.3 M. Jet Dynamic, Fiat
Grande Punto 1.3 M. Jet Emotion, Fiat Grande Punto 1.4 Emotion Pack, Fiat Grande Punto 1.3
M. Jet Emotion Pack, Fiat Grande Punto 1.3 M. Jet Diesel 90 HP. These variants are all priced
between Rs. 4 lacs and Rs. 7 lacs. All the variants of the Fiat Grande Punto are available in five
speed manual transmission. Grande Punto also has an option of either petrol or diesel. The
models like 1.4 Dynamic, 1.4 Emotion and 1.4 Emotion Pack consists of a 1368cc engine which
gives the power of 90 PS at 6000 rpm. Whereas, the models like 1.3 M. Jet Active, 1.3 M. Jet
Dynamic, 1.3 M. Jet Emotion, 1.3 M. Jet Emotion Pack and 1.3 M. Jet Diesel 90 HP consist of a
1248cc engine which produces a power of 76 PS except 1.3 M. Jet Diesel 90 HP, which produces
a power of 90 PS. Some of the variants include features like fire prevention system, immobiliser,
child safety lock and body colored bumpers and door handles. All the variants include
independent wheel suspension with Mcpherson struts, Helical springs and double acting
telescopic dampers with stabiliser bar. The rear has torsion beam, helical springs and double
acting telescopic dampers. These cars are in great demand in the Indian market due to their
breath taking designs and style, already introduced to the international car market. Fiat Linea has
introduced twelve variants in the market. The variants comprise of Linea Petrol Active, Linea
Petrol Dynamic Pack, Linea Petrol Emotion, Linea 1.4 T-Jet Petrol, Linea 1.4 T-Jet Petrol Plus
and Linea Petrol Emotion Pack. Most of the variants consist of an engine displacement of
1368cc. However, Linea Petrol Dynamic, Linea Diesel Active, Linea Diesel Dynamic Pack,
Linea Diesel Dynamic, Linea Diesel Emotion and Linea Diesel Emotion Pack consist of a
24

1248cc displacement engine. Fiat Linea was launched in the Indian car market in the month of
January in 2009. This model of Fiat is equipped with features like fire prevention system, dual
fog lamp, central lock, power windows and rear AC vents. The latest Linea variants also come
with an advanced ABS with EBD and front and rear disc brakes. Linea 1.4 T-Jet exhibits a power
of 114 PS. The maximum torque produced is 207 Nm at 2200rpm. It consist of a petrol engine
which runs on a five speed manual transmission. This model consists of an anti-lock braking
system with two airbags. It gives an average of 12 km per litre in the city, whereas provides 15
km per litre on highway. The Fiat Palio Stile has about eight variants in the market. These
variants are Palio Stile SL, Palio Stile SLE, Palio Stile SLX, Palio Stile SD, Palio Stile 1.3 SD
Multijet, Palio Stile 1.6 Sport, Palio Stile SDE and Palio Stile SDX. The price range of these
models lies between Rs. 3.5 lacs and Rs. 5 lacs. Fiat Palio 1.6 Stile sport comprises of a petrol
engine with four cylinders which is of 1596cc. Whereas the Fiat Palio 1.1 Stile comprises of
petrol 4 cylinder Fire with an engine displacement of 1108cc. All variants consist of a gear box
with a five speed manual transmission. The maximum power exhibited by 1.6 Stile Sport is 100
PS at 5500 rpm and the torque of this engine is 137 Nm at 4250 rpm. It consists of DOHC four
valves per each cylinder. Fiat Palio 1.1 Stile has a four cylinder FIRE petrol engine which gives a
displacement of 1108cc. The maximum torque of the engine is 57 PS at 5250 rpm and the torque
is 92 Nm at 2750 rpm. Engine of this model consists of a SOHC, 2 valves per each cylinder with
five speed manual transmission. Fiat Palio Stile Multijet is provided with a four cylinder multijet
diesel engine which gives a displacement of 1248cc. The maximum power generated by this
engine is around 75 PS (DIN) at 4000 rpm and the torque of this engine is 184 Nm at 2000 rpm.
It consists of a DOHC with 4 valves per each cylinder. The engine of this gearbox offers a five
speed manual transmission and overdrive on fifth gear.
Discontinued Car Models
The Fiat Company in India has discontinued some of its models such as Fiat 500, Fiat Palio, Fiat
Palio Adventure and Fiat Petra. Fiat 500 was discontinued due to low sales. Fiat 500 was
available in two variants- Fiat 500 Lounge and Fiat 500 Sports. Both the Fiat models were
equipped with an engine displacement of 1,248cc. Engine of this car generated a power of 75 PS
and provided an economy of 15.1 Km per litre in the city and on the highway it gave 20.2 km per
litre.
25

Upcoming Car Models

Fiat company in India is planning to launch a few new models, which are Fiat Bravo, Fiat Doblo,
Fiat Freemont, Fiat Sedici and Fiat Uno. Fiat Bravo and Fiat Uno are expected to be launched by
the end of 2011 and Fiat Sedici may be launched in the mid of 2012. Fiat Doblo is expected to be
launched in 2012 as a CBU. The Fiat Bravo is a hatchback car which will have three variants,
two of petrol and one of diesel. Prices of these models will lie between Rs. 19 lacs and Rs. 22
lacs. The Fiat Doblo is a D segment car which will have a petrol engine of 1368cc displacement.
Price range of this car will lie between Rs. 16 lacs and Rs. 17 lacs. As per Fiat Company Profile,
this model will be launched in only one variant. The top speed of this model will be 150 km per
hour and the maximum power of the engine will be 95 PS at 6000 rpm. Fiat Freemont consists of
a Multijet diesel engine and will be priced around Rs. 32 lacs. This model is launched in D+
segment with SUV body type. The Fiat Sedici will be launched in C+ segment and will have a
SUV body type. This model of Fiat will have a petrol engine of 1399cc. According to the Fiat
Company Information, only one model of this variant will be launched in the market. The Fiat
Uno is a hatchback car which will be launched in B+ segment. Price range of this model will lie
between Rs. 4 lacs and Rs. 5 lacs. This model of Fiat comprises of a diesel multijet engine of
1248cc.
Fiat Sales and Service network
Fiat company in India has network coverage of 175 service outlets in around 130 cities across the
nation. As per Fiat company profile, they have employed 800 people who are highly skilled in
sales and servicing of the car models of the Fiat Company. The Fiat Company offers a 24X7
roadside assistance across the entire country with value added benefits. Grande Punto and Linea
require services between the intervals of 15000 kilometers ensuring lesser visits to service
stations and they also provide a smart service reminder schedule. Fiat will now provide a 50month warranty period with the new variants and will ensure good quality with low maintenance
cost. Some of the prominent dealers in the major cities of the country are Concorde Motors,
Manipal Motors, Prerana Motors in Bangalore and Chennai; Tafe Reach Limited and V S T
Motors in Chennai alone. Autofin Limited, Concord Motors, Malik Cars in Hyderabad; Concord
Motors, Fortune Cars Private Limited, Wasan Motors Limited in Mumbai; A One Mirkana
26

Engineering Private Limited, A-One Motors, Him Motors Private Limited, Rama Motors Private
Limited, Sanya Automobiles, Techno Automotive Private Limited and Vivek Automobiles
Private Limited in Delhi. The Fiat Company in India is planning to double the existing
production of their manufacturing unit within next few years which is currently around 100,000
for cars and 200,000 for engines. Fiat India Automobiles Limited has recently signed a
Memorandum of Association with the Government of Maharashtra to enhance the existing
capacity of their plant. Apart from producing the cars of Fiat and Tata, this production unit will
also manufacture Power train engines.
Fiat Sales Performance
Fiat company in India has a strong sales network and sold around 23,551 vehicles in the year
2009. The company marked an increase of 241 per cent as compared to the previous year sales
which was around 6,897 vehicles. According to the Fiat company profile, the company is
planning to sell 130,000 cars annually in India by the year 2014. The manufacturing unit of Fiat
Company in India situated in Ranjangaon, Pune, in Maharashtra, has a capacity to produce
200,000 cars, 300,000 engines and 300,000 accessories and parts. During the year 2010, the sales
of the Fiat Company in India reached around 15,184 units but was less than 2009 in which the
company sold 18,065 units.
Fiat Used Car Market
The used Fiat Company cars in India are not sold through an official used car market of Fiat.
However, used Fiat Company cars can be bought from authentic used car dealers. Few dealers in
the Delhi region are Navya Motors, Suraj Motors, Dilori Motors, Malhotra motors, Vijay Motors,
Babbar car bazaar, Sai Krupa motors and properties, Classic motors and Galaxy Kars. They are
some of the most prominent dealers in the city.
Fiat Future Plans
Fiat India Automobiles Limited signed a Memorandum of Understanding with the Government
of Maharashtra to increase the manufacturing capacity of their production unit. Besides, the
production unit of the Fiat Company in India will also produce the power train engines apart
27

from Fiat and Tata cars. The Pune plant of the company has the capacity to produce 200,000 cars,
300,000 engines and 300,000 parts and accessories. According to Fiat company profile, the
company is planning to double the production within next few years. The Fiat Company in India
is launching new models which are Fiat Bravo, Fiat Doblo, Fiat Freemont, Fiat Sedici and Fiat
Uno.
Fiat Trivia
The company Fiat Spa stands for Fabbrica Italiana di Automobile Torino (Italian Automobile
Factory of Turin). During the year 1921, the workers of the company seized Fiat's production
unit and hosted a communist flag over them. Due to this reason, Giovanni Agnelli left his
position and quit the company. However, to reach a compromise the parties ended the siege and
reached a decision. During the Second World War, the Fiat Company was engaged in producing
military tanks and aircrafts for the allies. The Fiat Company has maintained its operations in
more than 61 countries and has created markets around the world. Revenue of the Fiat for the
year 2008 was 59.4 billion Euros and the net income was 1.7 billion Euros. The Fiat Company
also owns some of the most important editorial brands like La Stampa, Itedi and Italiana
Edizioni.

28

History of fiat

The history of Fiat began many years ago, at the dawn of Italian industrialization, in
which the company has always played a leading role. From that moment on, the Fiat
brand

spread

throughout

the

world

and

developed

extensively.

Today, following a change in corporate culture and mentality, the name Fiat is still
fraught with meaning, and not only on account of the cars we produce - cars with
attractive styling and exciting engines, cars that are accessible and improve the quality of
everyday life - but also on account of our heritage and tradition: let's take a stroll back in
time through the brand's history.

Gianni Agnelli

29

Among Gianni's first steps after he gained control of Fiat was a massive
reorganization of the company management, which had previously been highly
centralized, with almost no provision for the delegation of authority and
decision-making power. Such a system had worked effectively enough in the
past but lacked the responsiveness and flexibility made necessary by Fiat's
steady expansion and the growth of its international operations in the 1960's.
The company was reorganized on a product-line basis, with two main product
groups--one for passenger cars, the other for trucks and tractors--and a number
of semi-independent division and subsidiaries. Top management, freed from
responsibility for day-by-day operations of the company, was able to devote its
efforts to more far-reaching goals. In 1967, FIAT made its first acquisition
when it purchased Autobianchi.

Then, in 1969, it purchased controlling interests in Ferrari and Lancia.

According to Newsweek in 1968, FIAT was the most dynamic automaker in
Europe [and] may come closest to challenging the worldwide supremacy of
Detroit." In 1967 Fiat, with sales amounting to $1.7 billion, outstripped
Volkswagen, its main European competitor; in 1968 Fiat produced some
1,750,000 vehicles while its sales volume climbed to $2.1 billion ($11.5 billion
today). At the time, Fiat was a conglomerate, owning Alitalia Airlines, toll
highways, typewriters and office machines, electronics and electrical

Equipment firms, a paint company, a civil engineering firm, and an

international construction company. That same year, Fiat acquired Citron--one
of Frances major three automakers at the time.

30

However, in 1976, it sold the company. Following up on an agreement that

Valetta had made with Soviet officials in 1966, he constructed a Fiat plant in
the new city of Togliattigrad on the Volga that went into operation in 1970. On
his initiative, Fiat automobile and truck plants were also constructed in
industrial centers of Yugoslavia, Poland, Bulgaria, and Romania. In 1979, the
company became a holding company when it spun off its various businesses
into autonomous companies, one of them being Fiat Auto.

That same year, sales reached an all-time high in the United States,
corresponding to the Iranian Oil Crisis. However, when gas prices fell again
after 1981, Americans began purchasing sport utility vehicles, minivans, and
pickup trucks in larger numbers (marking a departure from their past preference
for large cars). Also, Japanese automakers had been taking an ever-larger share
of the car market (theirs increasing at more than half a percent a year). Thus, in
1984, Fiat and Lancia withdrew from the American market. In 1989, it did the
same in the Australian market.

In 1986, Fiat acquired Alfa Romeo from the Italian government. In 1992, two
top corporate officials in the Fiat Group were arrested for political corruption. A
year later, Fiat acquired Maserati. In 1995 Alfa Romeo exited the US market.
Maserati re-entered the US market under Fiat in 2002. Since then, Maserati
sales there have been increasing briskly.

In 1996 Giovanni Agnelli became the Honorary President of the Fiat Group and
Cesare Romiti took the office of CEO. In 1997 the parent company left its
premises in Corso Marconi and moved to the Palazzina Fiat of Lingotto, which

31

in the meantime had been converted into a Trade Fair and Convention
Complex.

Paolo Fresco
Paolo Fresco became chairman of Fiat in 1998 with the hope that the veteran of General Electric
would bring more emphasis on shareholder value to Fiat. By the time he took power, Fiat's
market share in Italy had fallen to 41%[citation needed] from around 62% in 1984.[citation needed] However,
a Jack Welch-like management style would be much harsher than that used by the Italians (e.g.,
precarious versus lifetime employment). Instead, Fresco focused on offering more incentives for
good performance, including compensation using stock options for top and middle management.
However, his efforts were frustrated by union objections. Unions insisted that pay raises be set
by length of tenure, rather than performance. Another conflict was over his preference for
informality (the founder, Giovanni Agnelli, used to be a cavalry officer). He often referred to
other managers by their first name, although company tradition obliged one to refer to others
using their titles (e.g., "Chairman Fresco"). The CEO of the company, Managing Director Paolo
Cantarella, ran the day-to-day affairs of the company, while Fresco determined company strategy
and especially acted as a negotiator for the company. In fact, many speculated the main reason he
32

was chosen for the job was to sell Fiat Auto (although Fresco fervently denied it). [citation needed] In
1999, Fiat formed CNH Global by merging New Holland NV and Case Corporation
Partnership with GM
Over time, most automotive companies around the world have become holding companies of
foreign as well as domestic competitors. For example, General Motors owned a controlling
interest in Saab Automobile and, until recently, in Isuzu. Fresco signed a joint-venture agreement
in 2000 under which GM acquired a stake in Fiat Auto. This made it appear as if Fiat was next,
although GM has made joint ventures with other companies without acquiring them.
Nevertheless, Fiat did not see the GM partnership as a threat, rather as an opportunity to off-load
its automotive business. The agreement with GM included a put option, which held that Fiat
would have the right to sell GM its auto division after four years at fair market value. If GM
balked, it would be forced to pay a penalty of $2 billion. When Fiat tried to sell GM the
company, GM chose the penalty. On 13 May 2005 GM and Fiat officially dissolved their
agreement.
The current CEO views alliances such as these as the deciding factor of the future success of
Fiat. In 2005, Fiat was courting Ford.
As part of the recent divestitures, under the guidance of CEO Giuseppe Morchio in 2003 Fiat
shed its insurance sector, which it was operating through Toro Assicurazioni to the DeAgostini
Group. In the same year, Fiat sold its aviation business, FiatAvio to Avio Holding. In February
2004, the company sold its interest in Fiat Engineering, as well as its stake in Edison.
Fiat faces a multitude of threats, including rising steel prices (up by 1630% beginning of 2008),
a strong Euro, and increased competition from Japanese and South Korean car manufacturers in
Europe. Although the light-vehicle market share of Japanese and South Korean automakers in
Europe is less than in the US (12.5% and 3.9%, respectively versus 30% and 3.9% in the US), it
has been increasing steadily at about a half a percent a year. In April and May 2009, the
possibility of a takeover of Adam Opel GmbH, a subsidiary of General Motors, was being
discussed between the two companies. The deal fell through, and General Motors held on to
Opel/Vauxhall.
33

Sergio Marchionne
Sergio Marchionne has impressed investors since taking over as CEO in June, 2004. Losses have
fallen steadily since 2002, and Q4 of FY2005 saw its first profit in 17 quarters, and had a profit
of 196M for the first 9 months of FY2006. Mr. Marchionne has reduced Fiat's managerial
bureaucracy and changed its tone to a focus on markets and profit. While the chairman, Luca di
Montezemolo, dealt with politicians and unions, Marchionne rebuilt the car business. The
success of the Grande Punto model has in large part been responsible for the turnaround in Fiat's
fortunes, but the quite successful Bravo (successor to the Stilo) and the award winning 500 have
really cemented it. Fiat has formed a joint venture with India's TATA Motors and China's Chery
motors. Under Marchionne it has also re-entered several large markets that it had exited years
before, such as Mexico and Australia. In December 2008, Marchionne announced Fiat have to
become one of the top five automakers to survive in the long run. In 2009, Fiat expressed interest
in acquiring General Motors' Opel and South American operation. GM declined Fiat's offer. In
Marchionnes leadership Fiat returned to the United States and Canada markets with the new
500.
Acquisition of Chrysler
On 20 January 2009, Fiat S.p.A. and Chrysler LLC announced their intention to form a global
alliance. Under the terms of the agreement, Fiat would take a 20% stake in Chrysler and gain
access to its North American distribution network in exchange for providing Chrysler with
technology and platforms to build smaller, more fuel-efficient vehicles in the US and providing
reciprocal access to Fiat's global distribution network.
In addition, the proposed agreement would entitle Fiat to receive a further 15% (without cash
consideration) through the achievement of specific product and commercial objectives. No cash
or financial support was required from Fiat under the agreement. Instead it would obtain its stake
mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more
Fiat models for in the US. Fiat would also provide engine and transmission technology to enable
Chrysler to introduce smaller, fuel-efficient models in the NAFTA market. The deal was
engineered by Fiat chief Sergio Marchionne, who pulled the Italian group back from the brink of
34

collapse after taking over in 2004. The principal objective of the partnership was to provide both
groups with significantly enhanced economies of scale and geographical reach at a time when
they were struggling to compete with larger and more global rivals such as Toyota, Volkswagen
and alliance partners Renault S.A. and Nissan.
On 30 April 2009, Fiat announced the signing of a series of agreements to form a global strategic
alliance with Chrysler, with Fiat receiving an initial 20% purchase/receive.

Marketing Mix of Fiat Panda

A marketing mix is used to convert the positioning strategy into a reality. It is made up of four
elements: product, price, place and promotion. The Marketing mix is used to reinforce the
advantages of the New Panda Carefully reflecting its core values and positioning. It confirms
how and why It will be of interest to various segments of the car-buying public.
Place Getting the Product to the customer
A marketing decision was made to launch the New Panda to the trade. A launch to the dealers
is different to launching a car to the public. Prepublication Directed at the trade is used to create
interest in the new model. Increased demand for a car is also know as a pull factor as it
essentially Pulls the product through the distribution channel from the manufacturer Toward the
consumer. In order to succeed at getting the product to the consumer, Fiat has an International
Network of agents or dealers who carry Fiat cars and other Marques (car brands e.g. Alfa
Romeo) in the companies stable. This means that support is given to the Fiat dealers around
Ireland to promote the new model in a way that generates demand for the new car.
35

Product Reflecting the Brand

In its branding and market positioning, Fiat wishes to communicate a Number of key attributes
of the New Panda it is an intelligent smart car that is ready for action and it is also a little
crafty, lighthearted and Irresistible. The New Pandas positioning statement is designed to
succinctly convey the product advantages and the character of the model In a way that will best
attract the New Panda target market.
Price Reflecting the position strategy
Fiat has a clear understanding of its key target market (young people and Other price-conscious
car buyers) and has designed pricing strategies to Best address their needs and the positioning of
the New Panda. In the case Of the New Panda it was imperative that it be keenly priced and also
that Running costs were low. The price quoted by Fiat is the price you pay at the dealership. This
is Fiats Open Book pricing policy. As a marketing concern transparency of prices is important.
Some prices quoted by competitors are ex works which is the price of the car quoted from the
factory. Additional charges for Delivery is thus not included in the final price quoted. Fiat has
finance packages. One example is where customers can opt to pay only 25 per cent of the total
cost of the car and then pay the balance of the cost of the car, i.e. the remaining 75 per cent, over
a period of 36 Months with zero per cent interest. Another package focuses on the Benefit of low
monthly repayments. This finance package is essentially a Hire Purchase agreement and is
subject to the Consumer Credit Act of 1995. Monthly payments can represent a more attractive
option to first time car buyers or people on a limited income, sooner than borrow 100 per cent of
the cost of a new car.
Promotion Communicating the positioning
Pre-publicity in the form of motoring reviews and test drives are critical to the success of a trade
launch as this activity must generate sufficient consumer curiosity and interest in the new model.
In this way, experts and driving Correspondents or journalists, are also given the opportunity to
assess the merits of a new car before the car-buying public delivers its own verdict in the form of
car sales. Fiat showcased the New Panda (formerly known as Gingo) at the prestigious 73rd
International Motor Show in Geneva. One of the most popular ways to do this is to hold open
36

weekends in garages where customers can come along to test drive the new car. By getting
potential car buyers to test drive a car, product usage increases. This has a knock on effect to car
sales. The primary above the line medium used to promote and communicate new car is through
advertising. In the case of the New Panda, the main Advertising mediums used, aside for those
used when communicating with the trade, are outdoor billboard advertising and TV advertising.
If we analyses who we are trying to communicate with when we are launching a new car, the
choice of TV and outdoor advertising makes perfect marketing sense.However, increasingly
newer forms of communications are being used, such as the internet, to reflect the attributes or
characteristics of the New Panda. Here we see the positioning statement being used once more
to form the basis of the advertising message.

SWOT Analyses
Strength

A brand with a strong historical value

Evocative power of fiat golden years (50s and 60s).

Some models, such as 500, are evocative of the glorious age of the Italian style.

Made in Italy. Great names and designers, such as Giorgetto Giugiaro.

The new top management could be more open minded. than the previous era of the
Agnelli brothers.

The presence of Fiat plants abroad.

Good at producing small cars.

37

Fiat environmental commitment_ also on a European level).

Weaknesses

Management culture is inefficient. For instances the top management takes to seriously
the concept of mature market and so focus on services, assistances and prices cuts more
than an innovation and brand asset management . The inefficiency of the management is
underlined by its inability to give the FIAT a serious position on the market. What people
perceive is a high ratio quality-price and this is an important evidence and result of an
inefficient management.

Lack of sensitivity aver noticed that FIAT seems not to be able to understand what
happens around. The problem is the lack of the important ability of understanding the
symptoms that anticipate problems. The consequence is the abrupt and disastrous reaction
of the company that tries to survive the crisis by firing people, selling off, projecting
reductions of costs, and so forth. Another important consequence is that this kind of
behavior leads FIAT to be always out of step if compared with its competitors and makes
FIAT blind in front of the huge changes that are taking place all around.

The supremacy of Engineering. As we have seen , the attention is focused on creating

a product which tries to _ be perfect from an engineering perspective. In so doing, FIAT
reveals to be reveals to be not customer-oriented.

Marketing is weak. Marketing is not considered a relevant source in order to understand

customers needs and market trends. It is considered as a way through which sell
something which is far from customers expectations A weak brand identity: nobody
knows what FIAT stands for.

Economics of scale. Fiat tries to implement economies of scale, although it has not the
financial power to sustain them. In addition, this brings the company to focus on quantity
rather than quality and innovation.

38

No defined segments.

Fiat never a pioneer in introducing new models.

The style is anonymous. After the old models of panda and Uno, the new models have not
been able to make fiat be recognizable. This is of huge concern because it means that
FIAT is not able to exploit in the right way the great potentials that are offered by the
Centro Stile.

Opportunities

Third world countries. In these countries, cars trend. To be simpler thus, they requires
much less money.

Opening up to the eastern countries which are characterized by lower labor costs.

The chiness market. The Chinese automotive market is growing very rapidly. Market
size, terms of investments and an improving infrastructure provide the basis for foreign
automotive companies. The potential of the Chinese market attracts not only
manufacturers but also the whole supplier industry.

Trend towards free trade. As the world trade organization expands its membership and
activities are under way for a new round of trade liberalization, Europe as a major player
in automotive trade should be among the prime beneficiaries from the opening of new
market and the strengthening of existing relationships.

The strong position of the Europe automobile industry in the world market. . As a major
player in international markets, Europe has established stable channels that constitute a
competitive advantage.

New EU Member States. New chances and possibilities stem from the enlargement
process of the EU. The new members offer interesting and profitable production
circumstances based, for instance, on their labor cost.
39

Threats

Impact of regulations on the chain flexibility. While changes in taste and technology
require constant reconfigurations in the automotive value chain, the regulatory
framework may make this task more difficult and costly.

Overcapacities. In recent years European, North America and Japanese markets see a
sluggish development in demand. On the other hand, a rapid capacity build-up in
emerging Asian markets and Eastern European markets is taking place. Both
developments may induce world over-capacity and stimulate price competition. Due to
high labor costs and lagging labor productivity EU producers are not very well equipped
for price competition in the standard car segment. This may induce additional pressures
for consolidation of the industry e.g. via mergers.

Major innovation competition from Japanese producers.The Japanese automobile

manufacturers have a very competitive position in global vehicle production and they are
strong competitors of European and American companies. In some fields like the hybrid
engine they lead the market significantly ahead of other manufacturers.

40

Products of Fiat
Fiat Linea
Presently, four different variants of Fiat Linea available are Active, Dynamic, Emotion and
Emotion Pack. A Linea Dynamic pack was also available earlier but has been discontinued since
April 2010. All these variants are available with both petrol (1.4 L FIRE) and diesel (1.3 L
MultiJet) engine option. These versions are decided on the basis of price to content ratio in these
vehicles.

Some Standard features of Fiat Linea include: automatic climate control, Blue & Me with
steering mounted controls, speed sensitive front wipers and volume control, dual rear AC vents,
Advanced Driver Information System (DIS) not found in many other cars.
Fiat Linea that marked the comeback of Fiat in the Indian market has now come up with Fiat
Linea T Jet. that will be launched at the 2010 Auto Expo in New Delhi. The all new Fiat Linea T
Jet is equipped with a 1.4L turbo charged petrol engine and shells out 114 PS (84 kW; 112 hp) at
5000 rpm and a striking torque of 207 Nm (153 lbft) at 2200 rpm. Acceleration and pick up
impresses too, with Fiat Linea T Jet zooming from 0100 km/h in 10.2 seconds and reaching to a
top speed of 200 km/h (124 mph). Some additional features of Linea T-Jet (Indian version)

41

include: 16 inch alloy wheels with 205/55 R16 tires having disc brakes on all four tires, Italian
leather seats, increased ground clearance of 170 mm (6.7 in), improved quality of interiors.

Fiat 500
Popularly known as Fiat Cinquecento in Italy and was originally designed by Dante Giocosa.
This lifestyle model from Fiat is a two door coupe and will be imported to India as a completely
built unit. Fiat 500 comes in two variants: Sport and Lounge - with classic compact design,
luxurious interiors without compromising on performance. Enhanced with special features like
Fiat code, Blue and Me controls which makes this premium hatchback unique from other cars.

The cheeky little Fiat 500 is a modern legend. It personifies retro bliss and everything about the
car is a throwback to the older Fiat 500 that enjoyed an iconic brand status. The new 500 is
exquisitely beautiful looking, its tiny proportions and high end fit and finish make it a car that
you want to keep as a trophy rather than drive around. The interiors follow the exterior styling
and the polished look is carried over there as well. Power comes from a 1.3 liter JTD engine
which does rocket this little car around. The only drawback is the steep pricing that this car .

42

CHAPTER-6
Data Analysis & Data Interpretation
Customers feedback

Q.1. Which of the fiat cars you prefer/like to use?

PARTICULAR

PERCENTAGE

PUNTO

20%

LINEA

30%

PALIO

40%

FIAT 500

10%

43

Cars preferred to use

Punto

Linea

Palio

Fiat 500

10%
20%

40%
30%

INTERPRETATION:Maximum number of people likes Fiat Palio. Next to Palio people prefer Linea. Whereas Fiat
500 is preferred less compared to Palio.

44

Q.2. which of these features you look for making a car buying decision?

PARTICULAR

PERCENTAGE

ENGINE

20%

BRAND NAME

10%

AVERAGE

20%

FUEL EFFICIENCY

40%

PRICE

10%

45

Features
Engine

Brand Name

Average

Fule Efficiency

Price

10%
20%

10%
40%

20%

INTERPRETATION:While making a decision to purchase a car, most of the people says they look for fuel efficiency.
Some people also look for engine and average. While they dont consider price first.

46

Q.3.How is the average given by Fiat Cars?

PARTICULAR

EXCELLENT

PERCENTAG
E

10%

GOOD

30%

AVERAGE

60%

POOR

0%

47

Average given
Excellent

Good

Average

Poor

10%

30%

60%

INTERPRETATION:-

48

Most of the people think the Average given by the Fiat cars is not that excellent but on an
average.
Q.4. which of the Fiat Cars you are using?

PARTICULAR

PERCENTAGE

PUNTO

10%

PALIO

20%

LINEA

30%

FIAT 500

40%

FIAT BRAVO

0%

49

OTHER

0%

50

FIAT CARS
Punto

Palio

Linea

Fiat 500

Fiat Bravo

Other

9%
10%

59%

23%

INTERPRETATION:As per the survey feedback many of the people are using Fiat 500 and LineA.

51

Q.5. Are you satisfied with the performance of your Fiat Car?

PERCENTA

PARTICULAR

GE

YES

70%

NO

30%

Performance of the Car

Yes

No

30%

70%

INTERPRETATION:70% of the people are satisfied with the performance of their Fiat car.

52

Q.6. Are you satisfied with the After Sales Services of your car?

PERCENTA

PARTICULAR

GE

YES

80%

NO

20%

After Sales Services

Yes

No

20%

80%

INTERPRETATION:Many are also satisfied with the After Sales Services given by the company.

53

Q.7. Based upon what you have seen, heard, and experienced, which of these car brand is
best according to their reliability.

PARTICULAR

PERCENTAGE

HONDA

40%

TOYOTA

20%

FIAT

30%

FORD

10%

54

Most Reliable Brand

Honda

Toyota

Fiat

Ford

10%

40%

30%

20%

INTERPRETATION:On the basis of Reliability most of the people have ranked Honda as the best brand; whereas Fiat
is ranked at the 2nd position.

55

Fiat v/s Honda city

Here we are after a long break thinking of which car to take for the perfect weekend. On one side
you have the Japanese speed and perfection and on the other hand you have the Italian luxury.
Both the cars are in the same segments which are top notch luxury cars. They are fast and have
one of the best luxury features.
Long cars are one of the needs of those individuals who like to carry their world with them. They
are perfect family or business cars; well there is no proper description which can describe these
beauties.
Fiat Linea Emotion

Honda City

Engine Type

Front Wheel Drive

In-Line Engine

Engine Description

1.4L, 1368cc FIRE Engine

1.5L 116.4bhp i-VTEC

1368

1497

Engine

Engine Displacement
(cc)

56

No. of Cylinders

Maximum Power

118PS at 6,600 rpm

104.68ps@5600rpm

Maximum Torque

115 Nm @ 4500 rpm

146Nm at 4800 rpm

Valves per Cylinder

Valve Configuration

DOHC

SOHC

Turbo Charger

Yes

No

Super Charger

No

No

Fiat Linea Emotion

Honda City 1.5 S MT

Transmission Type

Manual

Manual

Gear box

Five Speed

5 Speed

Drive Type

Front Wheel Drive

FWD

Transmission

Suspension System
Independent
Front Suspension

wheel,

Helicoidally

Springs,

McPherson struts with stabilizer,

Double acting Telescopic Dampers coil spring

and Stabilizer Bar
Torsion Beam, Helicoidally Springs

Rear Suspension

and

Double

acting

Telescopic

Dampers and Stabilizer Bar.

Steering
57

Torsion

beam

axle

stabilizer, coil spring

with

Steering Type

Power

Power

Steering Column

Tilt

Tilt

5.5 m

5.3 m

Front Brake Type

Ventilated Disc

Disc

Rear Brake Type

Drum

Drum

165 Km

NA

12.0

14.0

16.0

17.0

Petrol

Petrol

45

42

Tire Size

195/60 R15

175/65 R 15

Alloy Wheel Size

15

15 x 5.5 J

Turning

Radius

(wheel base)
Brake System

Performance
Top Speed
Fuel
Mileage-City (kmpl)
Mileage-Highway
(kmpl)
Fuel Type
Fuel Tank Capacity
(liters)
Tires

58

Other Specifications
No of Doors

India

India

Italy

India

Discontinuation Date

NA

1/1/2025

Introduction Date

14-Jan-09

9/15/2009

Warranty Time

NA

2 years

Warranty Distance

NA

80,000 kms

General Car Details

Country of Assembly
Country

of

Manufacture

Interiors and looks:

The Linea is far more spacious than the City. You can literally go off to sleep if you are tired
driving. The City is comfortable to drive. Well let me put it straight, it has the perfect space
which one requires. There is no wastage of space inside the Japanese car. Lots of features are
available inside both cars which are perfect and required when you need to go for long drives.
Handling and feel:
The City feels superb when it comes to handling. The Linea has a manual gear shift pattern
which might not be that flashy in todays age. The City on the other hand has a flappy pedal gear
box which can enhance your driving. You need not reach the gear knob all the time while
changing gears. The Italian engine is quite smooth when it comes to handling. The City is small
59

compared to the Linea in overall style and space. It has a powerful engine too which makes the
car light and fast.
Engine feel:
You might not want to get out of the Linea which is so smooth to drive. If you wish that can be
your permanent home with all the adjustments. The design of the City is done according to new
specifications which are top notch. Manual and automatic transmission is available in all variants
which make the City one of the best cars to drive. You can abuse the engine at power shifts and
the car will return a good economy.
Power train and performance:
I have driven the Fiat Linea with a 1.4 Turbo power plant (petrol) and I know that this engine
made life interesting in the Linea. The 1368cc FIRE (fully integrated robotised engine) does not
evoke emotions the way Italian stallions are supposed to, with its 88.7 bhp and 11.8 kgm torque
ratings. In comparison, the 1497cc i-VTEC motor of the City flexes 116.3 bhp and 14.9 kgm of
torque. So it is race over, matter closed, and verdict given even before the cars go through our
test process.

Just look at the power-to-weight ratios and you get a preview of things 71.5 bhp per tonne vs
105.7 bhp per tonne. Ready for murder?And cold blooded murder it was. The City was
effortlessly quick through the rev range and posted 4.78 seconds to 60 kph while the bulky Fiat
took 5.58 seconds. There was a clear two-second lead to 100 kph too, with the City stopping the
clock at 10.59 seconds and the Linea taking 13.03 seconds. The Japanese car thrashed the Italian
on the quarter mile stakes and during our passing speed tests too, proving that it is safer to
attempt overtaking manoeuvres with the City. Adding insult to injury was the top speed run the
City managed to nudge the 183 kph mark while the Linea threw in the towel at 171 kph.
We knew it was not a battle of equals but the convincing authority, superiority and sophistication
of the Honda power train stunned us too. The Fiat engine can be termed adequate, but who is
satisfied with adequate these days? While you can live with it in highway driving, city
60

commuting is not its area of strength again the City walks all over it in this regard. To Fiats
credit, the test Linea produced an overall fuel consumption figure of 14 kpl over 13 that the City
could generate but hey, we did have some serious fun driving the latter, okay?
Ride and handling:
The City is agile and athletic but the Linea is the more surefooted car. The Fiat is built in the
traditional manner and its monocoque and suspension are built to handle more powerful versions
than what we have in India. Like the A178 (Palio) platform, the Linea can handle bad roads as if
it is its birthright to do so. The Linea can stomp over terrible roads where the City feels
extremely fragile. Around bends too, it is the traditional architecture of the Linea that wins it
lacks the kind of power to unsettle dynamics, still. In comparison, the City is more of a
commuting tool that can handle highways than one that you use to carve corners in.

Finding and suggestion

Finding
People mostly prefer Palio cars in fiat
While purchasing car, people consider all the features mainly fuel efficiency, average and

engine
The Fiat performance is average
People are satisfied with the performance of the Fiat cars.
Mostly people are satisfied with the after sales performance of the Fiat cars.
On the basis of the reliability people select Honda cars.

Suggestion
61

 Reliability of the Fiat cars should be increased.

Market potential and Sales promotion should be increased.
The focus should be increased on performance section
.

CONCLUSION
At the end, we can conclude that, a marketing mix is used to convert the positioning strategy
into a reality. It is made up of four elements: product, price, place and promotion. The marketing
strategies help an organization to boost up its sales.
Here in the above case we have explained the importance of marketing strategies and its
significance in an organization.
Place Getting the Product to the customer.
Product Reflecting the Brand
Price Reflecting the position strategy.
Promotion Communicating the positioning.
People want the company to focus on the performance level.

62

APPENDICES
List of survey questions:
Q.1. Which of the fiat cars you prefer/like to use?
1. Punto
2. Linea
3. Palio
4. Fiat 500

Q.2. which of these features you look for making a car buying decision?
1. Engine

63

2. Brand Name
3. Average
4. Fuel Efficiency
5. Price

Q.3.How is the average given by Fiat Cars?

1. Excellent
2. Good
3. Average
4. Poor

Q.4. which of the Fiat Cars you are using?

1. Punto
2. Palio
3. Linea
4. Fiat 500

Q.5. Are you satisfied with the performance of your Fiat Car?
1. Yes
2. No

64

Q.6. Are you satisfied with the After Sales Services of your car?
1. Yes
2. No

Q.7. Based upon what you have seen, heard, and experienced, which of these car brands is best
according to their reliability.
1. Honda
2. Toyota
3. Fiat
4. Ford

BIBLIOGRAPHY

Books :Principles of Marketing, European Edition. Hemel Hempstead,

Principles of Marketing, 10th edition. Kotler, P. and Keller, K.L. (2006)
Marketing Management, 12th edition. Upper Saddle River, NJ: Pearson Education.

65

WEBLIOGRAPHY

Website:www.fiat india.com
www.wikipedia.com
www.ask.com
www.google.com

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