labels: fiat india pvt, automotive
For Petra''s sakenews
Rather than tinker wit
09 June 2004

All said and done, the Petra is the Siena by another name. Built on the redoubtable 178 Fiat platform, it has the same deceptively compact build with a great rear. And like the Siena, the Petra is powered by a 100 bhp, 1,600cc petrol engine, has power steering, power windows, airconditioner / heater, central locking and new upholstery.

The main difference between the two is in the price - the former comes priced at Rs4.75 lakh ex-showroom Delhi and Rs4.77 lakh ex-showroom Mumbai against the Siena's Rs5 lakh to Rs5.5 lakh - ex-showroom Delhi, and the fuel consumption. Dealers say the company has incorporated changes in the engine to enable the Petra to give an improved mileage of 12-km per litre against the Siena's seven to nine km per litre.

With virtually no difference in overall appearance and broad technical specs between the two, to an average buyer the Petra is bound to appear like a discounted Siena.

Clearly, Fiat India has not learnt from the past mistakes of carmakers like Maruti Udyog (Versa and Baleno) and Daewoo Motors (Matiz and Cielo) - tinkering with a car's price after it has been launched doesn't make it sell better.

Consumers view subsequent price slashes as discounts to keep sales moving. While discounting practices work with products like shampoos and soaps they don't work as well with cars because consumers view cars as extremely high value products and discounts take away part of the value a consumer reposes in the product.

To take the case of Maruti Udyog's eight-seater Versa, clearly a C-segment car powered by a 1,300 cc engine, the same that runs the Maruti Esteem, proved a nonstarter from the outset in the Indian market despite being a big success as the Emery in Japan. Analysts say the Versa with its bus like appearance didn't appeal to the personal car buyer's concept of a luxury sedan in India. Versa also failed to fit into the tourist vehicle segment on account of not being sufficiently roomy and rugged. The launch price of the Versa was about the same as the Esteem, at Rs5 lakh plus.

With sales stagnating and inventories piling up, Maruti brought the price down to Rs3.75 lakh almost on par with prices of its small cars Wagon R and Zen. According to the sales figures of Maruti for the months of April / May this year sales of small cars, Alto, WagonR and Zen have surged by 64 per cent over the past year, while Versa's sales have actually fallen by 6 per cent over last year.

This is even though it is a mid-sized car being sold at the price of a compact. The Versa has a 1,300 cc, 88 bhp engine, while the Wagon R is a small car with a 1,000 cc, 62 bhp engine, not to mention the fact that the Versa is far more roomy with better suspension, etc.

The upper C-segment model Maruti Baleno is another case in point where a price slash has not worked to its advantage as expected.

To go back a few years, the cute little Matiz from the Daewoo stable was launched at the same time as the Santro was launched from the Hyundai fold. At the time Santro came in with a 1,000 cc engine while Matiz was launched with an 800 cc engine. Both cars were priced similarly at around Rs2.5 lakh or so. Consumer perception equated the Matiz with the M800 because of the engine size even though the former had a superior MPFI engine (the M800 was later equipped with an MPFI) and Santro, probably because of its bigger engine despite its ugly hunchback appearance ultimately became a far bigger success than the Matiz and continues to be to this day.

Matiz' sales lagged uncomfortably behind Santro's for many years and subsequent price cuts didn't help to boost sales. Finally, Daewoo India, hit by its parent company's troubles shut operations in India and the Matiz story ended. The Daewoo Cielo also has a similar story.

The Petra is competitively priced in its segment on par with Tata Motor's Indigo (Rs4.70 lakh) the largest selling car at present in the mid-sized segment. Fiat India is clearly hoping to cut into Indigo's sales with Petra.

Fiat India's Siena never really worked in the Indian market due to various reasons. Mainly it acquired the reputation of giving poor mileage of about 7 to 9km per litre and unsatisfactory after sales-service. With the launch of the Palio in 2001, Siena's fate was sealed as buyers realized that the Palio was a Siena without a luggage booth and few wanted to pay more than a lakh for a dicky. Palio sold well in its first year after which it's sales also started falling due to its poor mileage.

Fuel consumption in times of rising fuel prices acquires serious dimensions especially in India. Fiat's cars are built according to European specifications of thickness of the steel gauge making them heavier and also much safer than the lighter Japanese or Korean cars in the event of an accident. However, the heavier body also makes the car consume more fuel no matter how many modifications are carried out on the engines. European cars will never be able to compete with the fuel efficiency of the Japanese cars with their lightweight bodies.

Consider that the New Honda City gives a mileage of 18km per litre and all the Maruti Suzuki cars give a mileage of above 15 km per litre. Until such time as the issue of safety becomes as important in India as it is in Europe, heavier cars here will find it difficult to compete with Japanese cars here.

Petra has many things going for it. For one it is a great value for money proposition, powered as it by a 100 bhp, 1,600cc engine with power steering, power windows, airconditioner/ heater, central locking and fabric upholstery all for an unbeatable Rs4.70 lakh (approximately Rs5.40 lakh on the road). Secondly, the Siena is a forgotten story, at least, for Fiat's and Petra's sake.

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For Petra''s sake