Mumbai: The Italian car manufacturer wants to forget its troubled past through a slew of new initiatives. The small car, expected to be launched next year, is just one of them

In 2006, Fiat India announced a joint venture with Tata Motors under which the two companies merged their respective retail networks. It was perceived to be a masterstroke. And it worked – but only for Tata Motors, which got Fiat’s engines for its cars, and showed a decent increase in sales.

For Fiat, however, the JV did nothing. For example, while the industry recorded a stellar growth rate of almost 30 per cent in the fiscal year ended March, 2011, Fiat was the only company whose volumes actually fell 15 per cent to 21,112 units, giving rise to murmurs that the joint dealerships are pushing Tata products more than Fiat cars.

With the Punto and Linea in its portfolio, Fiat’s market share was less than 1 per cent last fiscal. In contrast, even Volkswagen, which entered India only in 2007, commands a share of 2.04 per cent.

The Grande Punto (a compact hatchback), which Fiat wished to position as a lifestyle product, was supposed to sell 3,000-4,000 units every month, according to internal projections made by the company. However, the car, which starts at Rs 4.45 lakh (ex-showroom Mumbai) has a monthly run-rate of just 1,000 units. Compare this with Maruti’s Swift (Rs 4.43 lakh, ex-showroom Mumbai) which sells 12,000-13,000 units every month.

In the mid-size sedan market, Fiat is way behind everyone else. In fact, Honda and Toyota sell nearly as many Civics & Corollas each at almost twice the price than Fiat sells Lineas. So the massive disconnect with the customers was apparent, leading to speculations that the joint venture with the Tatas was about to be scrapped.

Source:http://autos.in.msn.com/features/article.aspx?cp-documentid=5135121