Mohit Arora
A strong relationship between automakers and their dealers is the core for success of any car brand in any market. A car model may receive rave reviews, have a good track record and advanced technology, but without an invested dealer to represent the brand well, the brand’s model will not flourish.
The joint venture between Tata and Fiat in India is one interesting example. While Tata Motors was experiencing strong growth in fiscal year 2011, Fiat was experiencing a double-digit decline in sales. In widely published interviews, Fiat officials said they felt that there was no real attempt at the dealerships to promote the Italian brand and therefore decided to end their venture of selling Fiat models at Tata dealerships.
While we don’t intend to assign blame of the breakup for the joint venture, and while it remains to be seen whether the dissolution of the partnership is a good long-term move for Fiat and Tata, the example does provide an important illustration about why automakers need to have strong alliances with their dealer networks. Continue reading ›
