Won’t dilute design for price: Jeep

The parent company of the 75-year-old Jeep brand of SUVs is betting on traits such as authenticity and capability to create a new segment for its niche customer segment. 

With the increasing global demand for SUVs, FCA seeks to position itself as a pure-play SUV manufacturer and use the Indian operations to tap the export market. 

The investments made by MNCs such as Fiat, with a long-time presence, have been substantial (after Fiat became FCA, it has pumped in $300 mn in the Ranjangaon facility (near Pune) to manufacture the Compass; it has a massive design and engineering centre in Chennai, where 1,200 people are employed; it has a warehousing facility in Chakan, Maharashtra, where it has doubled up space and investment for Jeep). 

Kevin Flynn, President and MD, FCA (APAC), speaking to DTNext, explains the “logic” of selling Jeep in a market flooded with MNCs and local manufacturers.“Globally, the SUV is a phenomenon. It makes sense from a utilitarian perspective. It comes with space flexibility and maneuverability. That’s why it is logical to move into that segment,” he says. 

FCA has set up eight exclusive destination stores nation-wide, including one in Chennai. “There are certain cities where we know the pattern. Some of the prospects overlap. In the major cities, we have taken the destination store approach. By the time we launch Compass, we will have 60 locations and that will grow within a year to 80. The push provided by big dealers will drive our expansion plans. Forty of our outlets are migrating from the Fiat brand to FCA and it is important for them to have viable business model,” he added. 

With FCA getting ready to export its first model, Flynn said the initial plan would cover the UK, Australia, Japan, South Africa markets. “We will be exporting parts as well. There is a part sourcing strategy which is under a different platform. We would like to closely support markets and because it is a global car, it offers different opportunities,” he added. On sales side, he said, “Our original Fiat strategy was biased towards rural areas which meant missing out on some major cities. We had to correct that. Simultaneously, we recognised the criticality of Tier II cities.” 

Elaborating on its growth strategies, he said “By embracing not just CKD (completely knocked down), but by local manufacturing and sourcing, we are able to be part of the global product plan. This brings a product into this market at a competitive price position.  We have looked at footprints across India where we think the segment development is happening which will allow us to sell the right units of Compass. We surveyed the marketplace to determine the volumes we can manufacture. Those locations are prioritised and we establish dealer points there. The keyword here is viability.” 

When probed about indigenisation, Flynn said, “This is a global car. The last thing that we want to do is change it so it works here. There is an  appetite for that. 

The Jeep in Hollywood needs to be same as that in Chennai. There has been too much adaptation instead of bringing in authenticity in the Indian market. We are about authenticity and we won’t de-engineer this car to meet a price point. From day one, we have tied up our supply base. We bought in new technologies so that we can achieve what we believe is a good price position.”