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'We see India as a great manufacturing option'

Business Standard:  September 09, 2016

New Delhi: As Fiat Chrysler Automobiles (FCA) India brings in the Jeep brand, the company has robust plans for a 'made in India' variant, the company's president and MD Kevin Flynn tells Sohini Das. Edited excerpts:

What are the plans around the Jeep brand in India? When will we see the CKD (imported and reassembled) models?

We are very excited about the Jeep. There are not many 75-year old car brands that can come into a country with all that heritage and brand DNA. This is the first dealership going live; we have another two going live this month and again next month the Mumbai dealership would be going live. We are now on a roll and progressing very well. We have chosen nine cities, where we would have 10 destination stores. We are bringing in these cars now as completely built units (CBUs) but in 2017, we will be manufacturing an all-new Jeep, yet to be seen by anybody in the world. We will be manufacturing that in Ranjangaon (near Pune). That is the next development and the story will continue from there.

How do you plan to position the new locally manufactured Jeep? Will India be the export hub?

India would be playing its role in Jeep's global plans. It'll be a product that is yet to break cover but is already fully developed.We've invested $280 million in the Ranjangaon plant to make it ready. We are on countdown now.

We've always built world-class cars in Ranjangaon. We don't see India as a cheap but a great manufacturing option. We want to make a lot more use of that unit and you will see a significant increase in production from that plant. Other original equipment makers (OEMs) are all exporting from India, and it is a logical step. We're evaluating the opportunity. More of that will become clear as we move towards the announcement of the next vehicle.

What will be the level of localisation in the new Jeep model and how do you plan to position it?

The CBU now attracts 180 per cent duty. The landed cost of the vehicle nearly trebles from the ex-factory price. The level of localisation and how we manufacture the local product is going to help us with the duties. The car will be far more attainable in the Indian market. It is going to be premium because Jeep is premium. The brand aspiration would remain premium but we can enter new segments in the Jeep (currently, Wrangler and Cherokee are available). We have done a lot of work to make sure this car is very relevant to our investments in India. It is a Made-in-India car.

Are the multi-brand showrooms planned to make FCA dealerships more viable?

FCA is our parent, the seventh largest company in the globe. India is one of our focus markets. Maserati is coming. In other parts of the world, we have dealerships that represent a number of brands under the FCA umbrella. We see no reason why that we wouldn't do the same in India. What we wanted to make sure is to have some of these destination stores opened to really establish Jeep for what it is. As the need for greater distribution grows, there is no reason why we cannot operate with a number of brands under one roof. We have worked hard with our dealer partners to give them a business model and a plan that sustains them.

We have not achieved the level of growth in Fiat volumes that we had planned and hoped to achieve. We are launching the Urban Cross at the end of this month and that will give us a good volume lift. Our existing partners have an option of becoming a multibrand dealership. We are mapping what are the marketplaces that will have demand for the product portfolio planned, and we will engage in conversations with our dealer partners to see their capabilities, as against our requirements, and how we can develop them as our long-standing partners. We have no unreasonable levels of attrition at the dealer-end so far.

What plans on the components business front, off-the-shelf engines? Magnetti Marrelli is part of your group; do you plan to roll out more AMT variants of your cars?

Legislation is changing across the globe in terms of emissions and in terms of particulate filters on diesel and different Euro-VI requirements. We have a whole commercial unit that looks after the relationships (with OEMs) and we will work to maximise those and our opportunities here. AMT (Automated Manual Transmission) is going to be a very important technology.

In India, it has been more on the premium end of the market, and given the traffic, quite surprising. Our future products would embrace that technology. We don't have AMT on any Fiat cars. We are working on our product development plan for Fiat and the latest trends in transmission would feature in that.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.