Fiat India sold all of 288 cars in January; blames demonetisation

Fiat sold only 288 units in January 2017 as against 630 units in January 2016

Tata Nano sold 391 units in January 2017

Fiat cut price of the Linea by up to Rs 77,000 in January

Punto hatchback price was cut by 7%

Fiat India, the subsidiary of Fiat Chrysler Automobiles, saw a large 54.2% decline in sales in January. The car marker sold only 288 units in January 2017 as against 630 units in January 2016, according to data from the Society of Indian Automobile Manufacturers (SIAM).

In fact, Tata Motors' Nano sold more cars that the whole of Fiat during January 2017. Tata Nano sold 391 units in January 2017. This is despite seeing a 75.7% year on year decline in sales.

What is more shocking is that car sales of Fiat have declined by over half despite a huge cut in the prices of its cars in January. While it shaved off 7.3% of the price of the Linea, the Punto hatchback price was cut by 7%. This brought the price of the Linea dowb by Rs 77,000. While the Punto Evo Diesel Active and Diesel Dynamic was reduced by Rs 41,117 and Rs 47,365, respectively.

The Fiat Linea Active diesel and petrol variants saw its prices reduced to stand at Rs 8,70,000 and Rs 7,25,000 respectively. The Fiat Linea Diesel Emotion was priced at Rs 9,99,000 after the reduction in its price.

Similarly, the Fiat Punto Evo Diesel Active and Diesel Dynamic after the price cut it was at Rs 6,40,000 and Rs 7,00,000 respectively.

However, this did little to raise the sales of the cars during the month. While sales of the Linea declined by 38.7% year on year, on a month on month basis too the sales declined by 24%. The Linea only managed to sell 57 units during January 2017.

The Punto Evo and Avventura saw an even greater decline in sales during the month as it fell by 56.7% YoY and 25.2% MoM basis. It only managed to sell 225 units of the Punto during the month.

Even sales of the Abarth continued to suffer as it saw a 64.7% YoY decline in sales in January 2017 and a 57.1% MoM decline in sales.

Kevin Flynn - President and MD, Fiat-Chrysler Automobiles (FCA) India blamed the poor sales on demonetisation and partly due to customers postpoing buys due to the Union Budget. “We realigned our pricing strategy on our Fiat range in early January 2017. After the announcement we witnessed an uplift in inquiries and our dealers are working on converting them. Purchase decision to retail takes time and we expect higher sales over the next 2-4 months, hoping GST is implemented well. In fact, passenger vehicle retail sales across the industry are down in Jan by approximately 30% and this in part is due to customers postponing their purchases due to the effect of demonetisation. The Union Budget announcement on Feb 1 also played a role in many customers deferring their purchase decisions. Until GST is implemented and its impact on the market is understood, we anticipate a conservative number of retails across the next few months," he said.

Flynn further added, "By realigning prices, we have decided to enhance the value proposition of our Fiat products. The Linea range is now available under Rs 10 lakh and this is a great value proposition given that the executive sedan is packed with occupant-friendly features and is known for its good looks, build quality and on-road dynamics. The Punto range now starts from under Rs 5 lakh with the Punto EVO Pure (Active variant). We are confident that our price realignment will have a positive impact on our sales going forward, although, gradually.”

Fiat was the only automobile company to offer a price cut in January, as most of the automobile companies had decided to hike their prices due to increase in raw material prices. While Toyota, Renault increased the prices of its vehicles by 3%, Tata Motors raised the prices by Rs 5,000 upto Rs 25,000 beginning to January 1, 2017. Maruti Suzuki and Hyundai also increased the prices of its cars by Rs 1 lakh from January.

Many of these car companies, however, saw a growth in their sales in January 2017. Maruti Suzuki's sales grew by 25% in January, while Hyundai rose by 10.2%, Toyota saw a 21.6% growth and Tata Motors saw a 21% growth.  

It was not only Fiat which saw a decline in year on year sales, six other car manufacturers, inlcuding Mahindra, had seen a huge decline in sales. Even on month on month basis 7 out of the of the 15 automobile manufacturers in India posted a decline in sales. This includes Toyota, Renault, Volkswagen, Chevrolet, Nissan and Mitsubishi.

While Toyota saw a 23.2% MoM decline in sales, Renault declined by 27.9% MoM, Chevrolet saw 67% decline in sales, Nissan declined by 6.6% and Mitsubishi over 300%.