X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Fiat increases exposure to India - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Sep 30, 1999

    Fiat increases exposure to India

    Italian auto major, Fiat, has firmed up plans to invest another US$ 280 m in its Indian operations. With this, Fiat's total investments in the country will stand at US$ 500 m. This was disclosed in news reports of a leading financial daily.

    Fiat India Automobiles Ltd. (FIAL), is a wholly-owned subsidiary of Fiat, Italy. Currently, Its presence in the country is limited to just two brands - Uno (small car) and Siena (mid-car). It has a plant at Kurla, Bombay, with a manufacturing capacity of 60,000 units.


    Small car market share as on July 31, 1999

    Fiat's increasing exposure to Indian operations underscores its commitment to the country. The latest round of investments will fund a state-of-the-art of welding shop at Kurla and its greenfield plant at Ranjangoan, Maharashtra (85,000 units). It will also enhance its dealer network, which currently stands at 50 dealers.

    Both its current brands 'Uno' and the 'Siena' are competing with companies that are well-entrenched in their segments. While the Uno (the biggest, small car) has received lukewarm response, Siena's sales have been encouraging.

    Over the next twelve months, Fiat plans to launch the Palio and the Station Wagon, which will enhance the number of brands in its stable, from two to four. But if Fiat wants to increase market share, it will have to introduce more brands, with several variants, targeted at different price segments. For instance, Maruti is finding it difficult to protect its marketshare despite having seven models with 31 variants, and an extensive distribution to boot.

    Apart from Maruti, Fiat will have to contend with other global auto majors like General Motors (GM) and Hyundai who have outlined plans to establish India as their base for exports. These two companies will be an even match for Fiat as far as financial muscle and technology are concerned. However, Fiat's insight into the Indian market from its alliance with Premier Auto Limited (PAL) will stand it in good stead.

    Another matter of concern for Fiat will be the looming threat of over-capacity in the auto segment. As per a study undertaken by the Association of Indian Automobile Manufacturers (AIAM), by FY2000, thirteen companies will be operating in the car segment at a combined capacity of 1.3 m cars. However, demand will be much lower at 500,000-700,000 m cars, implying that around half the capacity will be idle. However, Fiat seems to have factored this into its plans and will use the Ranjangoan facility to outsource vehicles for exports.

     

     

    Equitymaster requests your view! Post a comment on "Fiat increases exposure to India". Click here!

      
     

    More Views on News

    Tata Motors Ltd: Another Disappointing Quarter, Management fails to Perform! (Quarterly Results Update - Detailed)

    Aug 14, 2017

    Tata Motors Ltd disappoints again for both India and JLR business. Management commentary indicates a slow year ahead.

    Tata Motors Ltd: Dismal Quarter, Long way to go! (Quarterly Results Update - Detailed)

    Feb 16, 2017

    Tata Motors Ltd has announced its financial results for the third quarter of the financial year 2016-17 (3QFY17).

    Maruti Suzuki Ltd: Bumpy First Quarter. GST dents Margins! (Quarterly Results Update - Detailed)

    Aug 2, 2017

    GST realted cost impacts Margins, Management expects good year ahead.

    Hero Motocorp Ltd: Riding on the Scooters Growth, Maintains Margins! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Good Recovery in the Scooters market, expects pick up in exports too.

    Bajaj Auto Limited: Recovery in Exports but Domestic Disappoints! (Quarterly Results Update - Detailed)

    Aug 1, 2017

    New Export Markets picking up, Management expects good recovery in domestic Three wheeler market.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    TATA MOTORS SHARE PRICE


    Aug 23, 2017 (Close)

    TRACK TATA MOTORS

    • Track your investment in TATA MOTORS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    TATA MOTORS 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE TATA MOTORS WITH

    MARKET STATS