'We will launch two new models by the year-end'

At has been a bumpy ride for him. Particularly,
for his car. The Italian auto giant Fiat Spa has failed to make much of a dent in the Maruti-obsessed Indian car market.

For Enrico Ferraro, director, Fiat India Automobiles Limited, this has made the Indian auto mart a rather tough nut to crack. Sticking to the brief from his Italian bosses would thus seem almost impossible. But Ferraro is a confident man. "I believe in the beauty of things. We have some very beautiful machines to offer, which will sweep Indians off their feet," he claims.

Ferraro was recently in New Delhi to sponsor a fashion week, saying, "We couldn't have a better combination: beautiful Indian women and beautiful Italian cars!"

In the midst of his hectic trip, Ferraro took time off to discuss his company's strategy on Indian roads with Neena Haridas.

Even though Uno entered the market much before Hyundai Santro and Daewoo Matiz, why do you think it failed to give Maruti 800 and Maruti Zen a run for their money?

We have entered the small car market with the explicit intention of generating volumes. Our small car model, Uno, is aimed at this market. But we have not been able to generate volumes because out prices are not yet competitive. The Uno sells at over Rs 350,000, which is not comparable either with Maruti's prices or with those of Tata Indica.

The pricing is on the higher end now because we have not indigenised fully yet. We have achieved only 60 per cent indigenisation, which we intend to raise to 70 per cent in the coming year. However, for our pricing to be really competitive we will have to attain indigenisation levels of over 75 per cent. Maruti is able to keep its prices low because the 800 and Omni have about 85-90 per cent local content.

Is this the reason why Fiat Siena too has not taken off?

Well, almost. My agenda now is to indigenise rapidly. That is the only way we can beat the competition. Our study shows that consumers accept that Siena is a very beautiful, sturdy and safe car to drive. However, when it comes to the price, there are a lot of doubts.

In January this year, you announced that you will soon be launching couple of new models and new versions of Uno. What happened to that?

The new models are very much in the pipeline. In fact, the Siena Weekender will be introduced in September. We are showcasing it in the first week of August at a fashion week being organised in New Delhi, which is why I am here. The formal launch, however, will be in September.

But that is not all. We plan to unveil two new models by the year-end. These two models will not be extended versions of any existing models, but absolutely new vehicles.

Fiat Weekender is a hatchback saloon. What kind of pricing do you have in mind?

Well, it is aimed at the office-goers. It is not being placed in the Toyota Qualis range, contrary to popular perception. Weekender is an urban drive, not an offroader. We will probably price it around Rs 700,000 to Rs 800,000. That should be a good market to play in. Of course, if indigenisation goes as planned we should be able to bring down the prices lower at a later stage.

What kind of volumes are you expecting this year?

We expect to end the current year with about 20,000 units of Uno and Siena. Since Weekender will be only four months old till end-2000, we expect to close with 2,000-2,500 units of this version.

Why do you think Indian market is still small car-driven?

There has been some indication of market upgradation, but not very significant. Actually, the problem in India is that car buyers are very price sensitive. Most of the time, the purchase decision is influenced by the price of the car. The features or the brand name do not matter all that much. The important factor is 'which car is cheaper and also offers the minimum required features'. Concepts such as safety, sturdiness, etc still don't count. This is the reason for the market being still small car-driven.

Do you think with time mid-size cars will become the entry level car?

I don't think that is going to happen soon. Albeit, a lot of deluxe versions of the small cars are becoming entry-level cars. The base models are not being considered a good buy. That is a good sign and shows that customers are upgrading.

What are your investment plans in India?

We earmarked $1 billion for five years in 1997. We will be completing this tranche of investment this year. But there will be more investments as and when we launch new models and go in for more localisation.

Would you be interesting in picking up a stake in MUL?

Well, General Motors can best answer that question because they have taken over our car businesses. However, why should big companies be interested in Maruti when they themselves are going great guns. I can't say whether Fiat or GM would bid for a stake in Maruti: that is, if a stake is offered at all.

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