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Branding Mishaps: Why Fiat Uno failed in India?


The new 'Fiat' Logo

Fiat usually positions its cars as ‘reliable and sturdy’ cars for middle-class consumers. This strategy has worked well for the company especially in emerging markets like Brazil. In 1997, the company entered India through a joint-venture with Premier Automobiles Ltd (to sell its new car ‘Uno’), which it had successfully partnered with previously (since 1951) allowing the latter to sell Fiat cars in India that were dominantly used as taxis back then.

The Uno’s pre-launch image appeared to be very fascinating, but Fiat screwed it up by continuing its position strategy in India carried over from its huge success in South America. It believed that the similar positioning would work for them considering that both Brazil and India share similar attributes (both being emerging economies). One of the major problems was lack of market research.  For a start, their brands’ perception was largely associated with the cheap taxis that had been selling for several years. These cultural issues needed to be considered to counter such perception through aggressive advertisements. Apart from this, we reckon, the company failed to look into the demographic statistics of India. Only about 600000 cars were being sold to a billion people every year. On account of such low sales, Cars therefore were more of a status symbol in India than a utility option. Therefore they were wrong to market the car as a reliable workhorse, which obviously led to their failure to woe the Indian consumer.

When did Fiat learn its mistake?
Just after they re-launched the Palio in a limited edition bearing the autograph of world-class cricketer Sachin Tendulkar, the management knew they had indeed struck the right chord in the Indian consumer’s hearts.

What followed was the recent success of its Palio Stile and the latest new products in the form of, Linea and Punto (priced way higher than its competitors) that gave the company a great new Brand Image.

The Old 'Fiat' Logo

The Old 'Fiat' Logo

The company knew it had to build this new image to appeal to the younger generation. The new ‘Fiat’ logo played its part in building a newer generation Fiat image.

So has the Indian market changed to suit Fiat’s ‘reliable and sturdy’ image?
Not really. The company literally flipped its positioning strategy. Although today the number of Indian population who can afford a car has more than doubled up since 1997, it is still minimalistic when compared to the huge population. Check out the table below which indicates the rise in sales of passenger cars in India. This means that buying a car in India is still a status symbol than being a utility-based purchase.

Domestic Auotomobiles Sales trends for Passenger Cars

Domestic Auotomobiles Sales trends for Passenger Cars

Fiat now targets the higher class market in India focussing on ‘Luxury’ and ‘Style’ rather than ‘Reliable’ and ‘Sturdy’ image. This helped the company to connect with its consumers right away. The Consumers said “Well, we want our cars to be associated with ‘high status and comfort’ ”. Fiat responded, “You got it!! Buy the new Linea or Punto”.

One Response to Branding Mishaps: Why Fiat Uno failed in India?

  1. Pingback: Branding Mishaps: Why Fiat Uno failed in India? love luxury

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