Sunday, January 22, 2006

The Italian Job

It is an endless wait at the Tata-Fiat press conference. Frank Sinatra is crooning to keep the massive crowd’s restlessness in check. VIPs are being asked to vacate their VIP seats to make way for the ‘dignitaries’ (Sorry Mr Karthikeyan, you’re still not a ‘dignitary’). In stride Ratan Tata and Sergio Marchionne with their teams. I am fumbling with the possibilities that this union throws up. Ferraris on NH8. Maseratis on the Mumbai-Pune Expressway. Alfa Romeos blasting down Marine Drive. I shake myself out of the daydream. Alfa Romeos? Naah, sigh!

Curtains open. Alfa Romeo badge in the backdrop. Disbelief. Breathlessness. Eyes being rubbed. Reality dawns. Or hits hard. Four covered cars on the stage. Time to unveil them. Tata Crossover Concept, Indigo XL...ho hum. The Fiat Grande Punto – big hatch, affordable, beautiful, powerful – my next car? The Alfa Romeo Competezione Concept – achingly beautiful, scarily fast, excruciatingly unaffordable – surely not my next car! Alfa Romeos blasting down Marine Drive? Why not! Grande Punto’s zooming down Carter Road? An emphatic ‘Yes Sir’!


Fiat is just starting to climb out of abject disarray with the help of Marchionne, who has been there, done that. It is on an alliance-signing spree, seeming almost too eager to jump into bed with anyone who comes around with a big enough wad of cash. Already in are Suzuki and Ford. Tata is just climbing in, while GM - having climbed out a while back - is wheezing by the corner wondering how Euro 2 billion were so cleanly snatched away from under its dripping nose.

India being one of the fastest-growing automobile markets in the world, it would be perched on one of the most crucial branches of Fiat’s global resurrection strategy tree. The deal with Tata is all happy camaraderie and jolly brotherhood in front of popping flashbulbs, but just under the surface, it is dictated by brutal bottomlines. And if Fiat does not want to risk feeling like a prostitute a few years down the line, they better get down to business and make good use of the partnership, because Tata sure will.

To their credit, Tata-Fiat have taken the first hesitant steps towards a broader relationship. Floor-space in Tata showrooms is positive news for Fiat India. But not positive enough to let them make significant sales and help them swim back into the black. Despite being excellent products, both the Palio and Petra are dead in India. To make attempts to revive their sales can only prove futile – to the extent of being suicidal – primarily because these models will never be able to shake off the tag of being products from a directionless company plagued by an irresponsible management and an insensitive dealer network. Fiat has turned over a new leaf, but that has to show in its product line-up. The most logical solution would be to thoroughly revamp the product portfolio, possibly reinforced by Fiat’s products from Latin America. However, that is not very easy.

Transforming a few products – one in particular – into a niche is something that might not strike one as the most logical solution around. Dig deeper? When the Fiat Palio 1.6 GTX was launched in 2002, it acquired cult status faster than it could do a 0-100 (and it could go fast, mind you). Before the GTX, every hot-blooded testosterone-supercharged young man pretended to go fast in souped up Zens and – believe it or faint – diesel Indicas. Then the GTX came along at a reasonable price-point, and offered a hundred thoroughbred Italian horses which propelled the driver to scary speeds at an insane rate.

Forget the Palio, bury the Petra and launch the GTX as a niche performance hatch. The benefits are manifold. First and foremost, the move involves neither heavy financial investments nor the liability to produce a large number of cars every month. Secondly, the GTX will not cannibalise Tata Motors’ sales, in spite of being sold in the same showrooms. Tata wins, Fiat wins, consumer wins jackpot. Moreover, it will allow Fiat India to buy time; and time is something they need desperately so they can get back on track with a revised repertoire of great cars.

Most significantly, however, it will allow me to flirt with the GTX bridesmaid while the Grande Punto bride readies herself for the wedding. And then we can zoom down Carter Road with a ‘Just Married’ sign plastered to the back. Me and my Grande Punto!