Financial Daily from THE HINDU group of publications
Saturday, Jul 19, 2003
Palio helps Fiat cut losses 65 pc
Bangalore , July 18
RIDING on the back of the success of its flagship model, Palio, Fiat has been able to reduce losses in its Indian operations by as much as 65 per cent over the previous year.
Sources in Fiat told Business Line that since its launch in September 2001, about 44,000 Palios have been sold so far. Palio, which accounts for 90 per cent of the total sales of Fiat's products, has seen a steady growth in its segment. There was however a dip in total sales in June 2003 by 74 units to 1,131 over the previous month, but the decrease in sales has been attributed to developments in its parent company in Italy. Fiat, however, did not spell out revenue figures for both 2002 and 2001.
"The fact that our sales figure for June 2003 have held steady in spite of various rumours that have been circulating in the market is a very positive signal," sources in Fiat said.
In January 2003, (Fiat follows the calendar year), total sales increased 35 per cent over the corresponding period for the previous month while sales in May increased nearly 63 per cent to 1,204 compared with April.
Out of the 1,131 units sold in June, Palio accounted for 1,037 units while Siena, Adventure and Uno accounted for the rest.
Sources said the 1.2 ELX petrol variant of Palio accounts for over 60 per cent of the total sales. All the 500 units of the limited edition Sachin series in the 1.6 petrol variant were sold out. Palio's latest version, the 1.9 diesel variant was launched in March 2003.
Sources said that the turnaround of the company began with the launch of the Palio in September 2001 as it opened up a new segment in the market with a 1.6 hatchback.
Sources said Fiat carried out a clinic test about the customers' preferences and also undertook an extensive road test totalling about 100,000 km. At the basic level, certain changes were incorporated like the car body was reinforced and the ground clearance was raised to suit Indian road conditions.
Fiat also brought out several variants of Palio at different price points in an attempt to cater to all the segments.
Sources in the company said with a product portfolio covering both the B and C segments of the market already in place, Fiat plans to consolidate its operations in the current year by focusing on stability and growth.
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