The best Compass in the world is made in Ranjangaon. As more products are brought in, they will be manufactured in the Ranjangaon facility and investments will be made here, says President & MD,
FCA India.

How has your Indian journey been so far?
It has been exciting to say the least. Since I came in eight months back — it will be a year in September — it has been quite the journey and I wish I could have had a little more time to repatriate and reacquaint myself after 30 years outside India and returning to the country and looking at how things are. But all I can say is there is only one direction now, up.

You have been sounding very positive on the outlook notwithstanding the current crisis. I do not think you have had any job losses here. You seem to be on track with your plans. So, how have you managed the situation under lockdown?
The most important thing during the lockdown and since has been the safety of the employees. That is the number one concern for all of us in the auto industry, including us here in FCA. We have made that the priority as we come out of the lockdown.

As far as managing it is concerned, it has not been without issues but that is what we are here for, to solve those puzzles. We have undertaken a whole series of actions from making sure that the supply chain is being managed correctly to making sure the safety protocols are in place in the plan at the NOC to make sure that working from home is seamless. I keep engaged with the employees.

All of those activities together and the commitment to make sure that we are in this together is what has compelled us. There have been no job losses to make sure that as we restart, we hit the ground running. It is not a bed of roses but we are managing through the situation.

Share with us your plans about hitting the ground running in terms of new launches, in terms of building on the base you already have in India. Post the Compass and the demand that you saw for that particular model, what is next in line? The Trailhawk of course is a slightly more premium model. What are you going to be focussing on going ahead?
Obviously, the Compass has been very well received. It is a phenomenal product. Customers are extremely happy with it. The brand has been established in the psyche of the people as it always has been a reliable, everlasting brand. So to build on that, we are actively pursuing three-row SUV as we have mentioned in our capital markets announcement. We are also actively investigating a sub 4 metre SUV. Two more iconic products will be coming to the showrooms and all of this are in addition to the new Compass. So those plans are all in the works.

What is the pricing that we are looking at here? Are you looking at entering the slightly lower segment or are these continue to be slightly premium models?
Jeep is a premium brand. We will obviously depend on the segment to be competitive. We have always been an aspirational brand.

Do you still see demand for that given the situation we are going through? On one hand, we are hearing good things about the recovery and the demand is intact, particularly when it comes to the auto space. But on the other hand, we are hearing that it may take a while for things to fully come back to normal and perhaps the premium segment could be more challenging?
You are right. There is no denying it. In a time like this, people and consumers tend to conserve their resources. So, in the immediate future, it is absolutely clear that the value purchases will be the ones that will be predominant. They will be the ones that will rebound faster but car buying will always be an aspirational purchase, an emotional purchase and we do see that the demand for premium products and the larger products there and it will rebound.

It will rebound probably at a different weight and slightly slower than the entry level segments.

The Compass is being manufactured here in India. What is your experience of manufacturing, of setting up a company here in India? Given the government’s recent push on Atmanirbhar Bharat, what kind of numbers are you looking at could they grow if we see further emphasis on the Indian market?
Today, the Compass is a localised product. A high percentage of localisation components are sourced here in India. It is built in Ranjangaon facility. In fact, you would be very interested to know that of all the plants that built the Compass in the world, the best Compass in the world comes out of Ranjangaon. So it is something that our industrial colleagues and our team in Ranjangaon should be commended for. It is an absolutely fabulous product and we have seen that also come out of the consumer side.

There are inherent advantages in continuing to increase that localisation percentage in India, obviously as components are locally sourced and more and more percentage of local sourcing adds to it being more cost competitive. From a component manufacturers’ standpoint, Indian automotive components are now competitive the world over and we can sustain and be competitive in any part of the world. That does not mean that there are no areas for improvement.

Of course there are areas where we have to get better and if we are competitive and we continue to improve on this world class engineering componentry and design, then we will be automatically Aatmanirbhar.

You also export the Compass from India to global markets. Would you as a company be looking at investing more in manufacturing facilities here? Do you see that happening for products for the Indian or global markets?
Yes, a very short answer is absolutely yes. And to give a little more context on the “absolutely yes,” the products as they are brought in, like all the products that I mentioned to you, will be from Ranjangaon. As we bring those products in, obviously capital will be needed to make them and to tool them up right here in Ranjangaon. Clearly, those will be adding to the infrastructure for building and manufacturing all of the products in our portfolio that we are bringing forward.

So strategically, India does seem to be assuming more and more importance in the overall global strategy when it comes to Fiat Chrysler?
India has always been an important part of the Fiat Chrysler strategy. From an export out of India to right hand drive markets, India will assume a more important role in FCA’s global strategy from a right hand drive supply. As things move forward, clearly as the business cases present themselves, who knows it might be even more than that! We are studying all of that.

ET Now: Do you feel we need more incentives on the policy front to overcome near term challenges?

Partha Datta: I think yes, there are a couple of things that would help certainly, scrappage bonus for instance, which I think is already in the works. From a policy standpoint, something like that would essentially drive refreshing vehicles, getting that piece of the consumption going and if there is added incentives on the liquidity and on the consumption side to make it easier for people to purchase and get vehicles that also adds to alleviating some of the concerns.

Obviously, we cannot predict the stock market today, but these are the two things that I feel will drive consumer behaviour.

ET Now: Do you also see us benefitting from the current conflict with China? Do you see India emerging as the natural, more attractive option when it comes to foreign companies looking to set up base?

Partha Datta: I am going to answer this in two parts. I do not particularly feel that conflicts necessarily are always the way to get improvements going. I really do hope that this conflict is behind us and I do hope that both sides resolve it as soon as possible with the safety of all of the people on the border. So I would not get into that piece.

India today has a very strong auto component industry and our engineering standards are improving on every single day in the auto component industry. We will have to be competitive in the world. If we can maintain those global standards and the world class manufacturing and engineering services which we do today and if we continue to improve on it, I think the sky’s the limit. I do not see why we would not be a worthy competitor to anybody, leave the conflict alone. We would have to stand in the end on the strength of our competitive product.

ET Now: A couple of other aspects – diesel and petrol prices are almost at par now. What is the kind of impact that is having on Fiat Chrysler as a company, as well as the industry?

Partha Datta: We have both power trains to offer to our customers — both gasoline and diesel. From an offering standpoint, there is really nothing on how it would affect Fiat Chrysler because we cater to the demand and we have both types of products. But to answer your industrial segment question, it is true that with similar prices of diesel and gasoline, I would say the entry level segments will see a marked shift towards petrol engines.

As you go to the more premium segments, you will probably continue to have a significant volume of diesels because there people are looking both for performance and fuel economy on the more expensive and premium side. Customers will begin to make their purchases according to their lifestyle. In urban areas, small cars will probably see a shift in the mix towards petrol engines. But from an FCA standpoint, we got both. Our customers can choose and we will cater to whatever the demand is.

ET Now: In terms of numbers, what have the sales figures been like so far? What kind of capacity utilisation do you currently have?

Partha Datta: I cannot tell you the numbers. But I will tell you that from an industry standpoint, obviously April was an unforeseen month in the entire auto industry’s history. Not a single car was sold for the first time and then in May we began to come back. In June we are beginning to see growth up to twice in the segment. So all these are portending a very good return.

Hopefully by the Diwali or the festival season this year, we are going to see the excitement and the interest and the consumption come back. The industry has reacted really well to this from what I can tell. We used to go to the showrooms to look at cars, but now the digital site has come up and the industry has reacted very well to it. Around Diwali time, we will begin to see consumption and some excitement in it again.