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Fiat Uno: The story of India's greatest automotive debacle
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Thread: Fiat Uno: The story of India's greatest automotive debacle

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    Fiat Uno: The story of India's greatest automotive debacle

    UUH! NO!

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    Two hundred and ninety thousand people had put in their faith, courage and hard earned money in booking this unsung hero of the yesteryears.
    Two hundred and ninety thousand souls pre booked this star, in what was billed as the greatest comeback, ever, of an Italian giant.
    A giant that has won many hearts since the past 4-5 decades from the millicento, the select, the super select, the president and later, the padmini.
    A giant called Fiat.
    Circa 1995, the automobile industry underwent a delicensing, and many foreign players were beginning to enter the market. Major players like Maruti, daewoo, Opel, Ford had already entered leaving the two giants-HM and PAL in the lurch. Out of the two, PAL (fondly remembered as Premier Automobiles Limited), was in a better position and at the same time, established an alliance to manufacture, distribute, market, sell and service the Peugeot 309 GL and GLD, another car that was getting launched.

    But the bigger action, without a doubt, lied in the small car market. The 800 was the best selling car of that time and the only option to upgrade for the wealthier rich was, of course, the zen, which in actual was its two generations old successor. That was the time when Fiat decided to re-enter India with an alliance with PAL and market its first true challenger to the zen-the UNO.
    Uno, to many, was just another car getting launched but to automobile aficionados and auto enthusiasts alike, it meant "the one or "the number one aka numero uno".
    The car in original was launched in Europe in 1984 and underwent a facelift in 1992, this was the version that Fiat was preparing to launch in our country.
    Bigger is better was the mantra and Fiat had already ensured that the buyer would get more than what zen offered in terms of style, space, comfort, ride, handling, technology, performance etc etc, though the latter had a different story altogether.
    The car was formally unveiled in mid 1995 and between the day the bookings opened till they closed, a record 2,90,000 plus fully paid deposits were recorded at dealerships across the country, a record that remains unbeaten to this day, even today. Initially launched in non AC version with a 999 cc, 45 bhp FIRE engine with a single barrel weber marelli carburetor, the launch also coincided with another major launch handled by the same company-Peugeot 309 under the banner of PAL-Peugeot Limited. The car was a notchback with a 1370 cc 4 cylinder petrol engine and was made for emerging countries like India, where ride and rigidity took precedence over luxury and comfort. But, little did anyone could have imagined what happened later in that year.
    Its billed as one of the biggest ever labour disputes which led to a massive plant shutdown, cancellation of bookings and after which, someone had to pay a major price.

    The coincidence of one partner handling two major european competitors was considered by many as the biggest reason for the Kurla and Kalyan plant shutdown. PAL, headed by Doshi family, couldn't strike a compromise by the labour union, often in tussle between the work culture and preferential treatment given to one brand over another, resulted in a major strike that lasted in no less than 6 months. Often the debate raged on a story where some movement of dyes from one plant to another (reducing the manufacturing capacity at Kalyan) caused loss of workers' wages from 1500-2000 rupees per month.
    This was a major PR disaster for both Fiat and Peugeot, and Fiat was the bigger loser of the two. Customers who waited for weeks to months didn't get their cars, the dealers remained clueless on whether or not the cars and associated parts would arrive or not, and the worse of all, the final nail in the coffin came when Peugeot announced its exit from the Indian market in late 1997, despite selling 10,000 units of the 309 in its first year, simply because it had accused PAL of breaching agreement due to its roots with Fiat. Losses amounting to huge amount (touted to be Rs. 900 odd crores), and costly CKD operations with no operating profit was culprit, and this caused immense loss of trust in customers who bought the 309, being now left in lurch for service and spares.The kalyan plant, which was shut down in 1996, manufactured the 118 NE and assembled the 309, was long gone. Rest, they say, is history.

    When Fiat did step in in 1997 to control the damage, it was already too late. Lakhs of bookings were cancelled, with the product itself plagued with many issues. The AC version, launched a few months later, simply couldn't bear the additional load of the weber carb and this killed the performance with a nasty flat spot which hampered driveability to a big extent. Few thousands of cars that were on the roads were orphaned by lack of proper after sales and spares support from the then newly renamed company-IND auto Limited. Even to this day, many customers claim that the booking amount that they deposited way back in 1995-96 hasn't been returned and single handidly blame PAL for Fiat's disastrous start in India.

    While, the Uno itself was not a sales success per se, it did give India many firsts in small car segment.
    -Double crank prevention system
    -Full length door armrest
    -Front seats with eccentric rail mechanism which raised the seat when it was pushed forward-a boon for short drivers
    -wide angle single blade wiper
    -first hatchback with a power steering option in Diesel version (Indica came in much later).
    Also, it was properly spacious for 5, has huge boot space plus very comfy front and rear seats and above all, it was a very aerodynamic design with built in spoilers at the sides for better wind dissipation.

    Fiat did try many times to correct the faults associated with the product like relaunching the Uno petrol with a twin barrel Mikuni carb, which finally eliminated the flat spot and made the car driveable with AC on, reduced prices to M-800 level with their decontented trend version (minus parcel tray and front seat head rests) and later in 1997, also launched it in 1.7 litre 57 hp diesel motor under 4 lakhs price band. Sales of the car finally started to gain momentum, but it was just shortlived by another blockbuster which came in late 1998, the Indica.
    The Indica was cheaper, better equipped, came in a multitude of variants and its DLX model was packed with equipment akin to cars two segments up. And, it came at a price which was even cheaper than the cheapest diesel uno was available with and coincided with come petrol hatches. Rs. 3.9 lakh to be precise. The Uno had a superior engine, superbly caliberated suspension which made it the best riding car that time (it even rode better than the stiffly sprung Indica) and was more reliable as well (compared to both the Indica and the forgotten Zen diesel). But, it never regained traction and was often billed as Fiat's orphaned child. So much so that newer, more contemporary cars like the siena, weekend and later the palio had overshadowed it completely. The diesel was a reliable workhorse that was never upgraded to BS-2 norms and the petrol motor was finally changed to a single point, centrally fuel injected 1242 cc FIRE motor with 62 bhp, which made the Uno much faster off the block. It was surprisingly marketed as First ever Euro 3 ready engine (even the price list mentioned that), but despite a multitude of variants (EL, ELX and later jubilee), the car flopped in the market, already now overcrowded with many small cars from Korea and Maruti itself.
    The palio, a far more modern and contemporary product, even made the uno look redundent and the car died a slow, gradual death. Not with a bang, but with a forgotten whimper.

    There are still many Unos that ply on the Indian roads today and a used one can be held for dirt cheap price. Many owners have exchanged hands but the fact remains that it redefined what a compact car should be. It was big on space, comfort, safety, sturdiness, ride and practicality and aesthetically, not many liked its looks in the later years but fact remains that the car never received that kind of support it should have received in first place. Some people still swear by it, and that time, it was a huge opportunity gone lost......in another chapter, perhaps in the long forgotten pages of history books.

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  3. #2
    Respected Member V Sunilkumar's Avatar
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    Re: Fiat Uno: The story of India's greatest automotive debacle

    Excellent article

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    Re: Fiat Uno: The story of India's greatest automotive debacle


    Very well written and very valuable post,

    You make NCR Team of MFW Proud that we have you with us,

    Thanks & Regards
    The ball is made to roll when the world has withdrawn the desire & above all the will - that's about the torchbearer known as me

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    Re: Fiat Uno: The story of India's greatest automotive debacle


    I went down the memory lane completely while reading the whole article you shared & it is was very unfortunate for FIAT. People put the long earned trust in this new model but were met with such a treatment. I clearly remember the labour issues that happened as in 1995 I joined my BE in Aurangabad & really admired the car. Used to hear from people that a FIAT Uno-D owner never sells as it was one of the best diesel engine available & gave fantastic mileage.

    Thanks for the post.
    Vijay Pratap Singh

    Fiat Palio 1.9 D ELX || Color: Silver || Registered In: Feb 2006 || ODO - 80K || Currently Owned
    Honda Activa || Color: Golden || Registered In: Dec 2012 || ODO - 900 || Currently Owned

    You never see further than your headlights, but you can make the whole trip that way!!

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    Respected Member nilesh.naidu's Avatar
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    Re: Fiat Uno: The story of India's greatest automotive debacle

    Beautiful write up
    Nilesh Naidu -Siena 1.2 ELX

    “Living with a conscience is like driving a car with the brakes on”

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    Respected Member manikandan's Avatar
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    Re: Fiat Uno: The story of India's greatest automotive debacle

    Well written article Siddharth! I had a chance to drive this beauty on Yercaud hill with 5 people on board. Man what a machine and what a pickup.

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    Re: Fiat Uno: The story of India's greatest automotive debacle

    Great article bro.

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    Respected Member itsjerald's Avatar
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    Re: Fiat Uno: The story of India's greatest automotive debacle

    mm. good article. My friend have this car and it is a good car.
    Thanks and kind regards,
    Yamaha sz-r
    Fiat Palio 1.2 EL PS 2002

  10. #9
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    Re: Fiat Uno: The story of India's greatest automotive debacle

    very good article, nice write up. My cousin has a Uno D, i have been after him to sell it to me, however he never wants to part company with it.

    Fiat Adventure Sports 1.6

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  11. #10

    Re: Fiat Uno: The story of India's greatest automotive debacle

    Awesome writeup and surely the most painful story. Whatta lovely car Uno was.

    Also, Sid, do you know more about the court case FIAT faced.

    I quote..
    A Supreme Court verdict has directed Fiat India to pay about Rs 400 crore as excise duty, the Economic Times reports. The case, which has been in court for almost a decade, concerns the reduced excise duty that Fiat India paid between 1996 to 2001.

    During that time period, the Fiat & Premier Automobile joint venture imported CKD (Completely Knocked Down) and SKD (Semi Knocked Down) kits for the Uno hatchback model. The car was sold at a price lesser than its cost at the time. The production cost was reportedly Rs 3.80 -3.99 lakh per car, while its assessable value (on which excise is paid) was only Rs. 1.85 lakh. According to the excise department, the Italian carmaker sold the car at a loss, as a part of its market penetration strategy.

    After the excise department discovered that the Uno's wholesale price declared by the company was less that the production cost, it charged Fiat and Premier to pay duty on the cost price. But the company contested the charge, arguing that since their selling price was lesser than the cost price, its assessable value was also lower.

    Ultimately, the court verdict held that excise duty has to be paid on the cost price and not the sale price. Also, Premier Automobile will have to pay Rs 49 crore in excise as Fiat’s former JV partner.

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