Fiat Chrysler Automobiles looks to increase localization, reduce costs and grow SUV sales in India, says GlobalData

Following the news that Fiat Chrysler Automobiles (FCA) has announced an investment of US$250m to increase sales volumes and enhance portfolio in the lucrative SUV segment in India;

Animesh Kumar, Director of Automotive and Travel & Tourism Consulting at GlobalData, a leading research and consulting company, offers his view:

“Through the investment, which is in addition to the US$450m invested by the company in India over the past five years, the company intends to introduce next generation Jeep Compass, a three-row SUV, as well as locally assembled Jeep Wrangler and Jeep Cherokee. These vehicles will be manufactured in the Ranjangaon plant, co-owned by FCA and Tata Motors. The inclusion of new vehicles in portfolio and local manufacturing/assembling will help the company enhance the Jeep brand, increase localization reduce costs and boost sales.

“The company tasted success with strong sales of Jeep Compass. However, it has so far failed to gain significant market share due to stiff competition and limited product offerings. FCA presently has less than 1% share and has only two vehicles in Indian market – locally assembled Jeep Compass and the CBU imported Jeep Wrangler.

“The SUV segment in India presents significant opportunities and several new players and models have entered the Indian market in recent times. Players like Kia and MG Motor have entered the market and now the segment boasts of several models under sub-compact SUVs, compact SUVs and full-size SUVs. Though the Indian automotive market has been struggling, feature loaded SUVs have proved to be an exception. However, there is a higher demand for affordable SUVs like the compact and sub-compact SUVs. Since FCA does not have any compact or sub-compact SUVs planned, it will be difficult for the company to gain sizeable market share.”

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