Friday, 5 August 2011

Fiat, Mercedes, BMW & Ford open cafes, lounges to boost brands and warm up to future customers

If you love food, wine and fast cars, this is where you want to go: carmakers Fiat, Ford, BMW and Mercedes are busy opening cafes and lounges in the country to boost their brands and warm up to future customers. 

Italian carmaker Fiat, desperate to check sagging sales in India, will open its signature cafes in New Delhi and Pune next month. 

The cafes, to be run in tie-up with Lavazza, will have Fiat cars displayed in a lounge environment replete with pasta and other Italian food and aromas of espresso wafting in. And there will be a cultural space for film screenings, theatre and artwork. "The idea is to bring out the Italian-ness of Fiat while introducing the style and technology to consumers," says Fiat India vice president, Commercial Vehicles, Ravi Bhatia. 

Fiat is not the only carmaker in the food street. Last week, luxury carmaker Mercedes-Benz India opened a star lounge at the Delhi International Airport where it has a model of sports car SLS AMG on display and an exclusive cafe for its existing customers. 

"When it comes to luxury retailing, you are not just selling cars but a lifestyle," says Mercedes-Benz India Director - Marketing & Sales Debasis Mitra. "We realized we could not just expect customers to visit us, we had to reach them where they are too." 
And its primary rival BMW, which has been running a lounge in New Delhi for three years now, plans to open a second lounge in Mumbai this year. "Not everyone comes to buy a BMW. Those who do not dine or buy a car use the wiwill fi available for work. This is a way for them to indulge with the brand," a BMW executive said, seeking anonymity because he is not authorised to speak. The lounge conducts art exhibitions and cooking classes to connect with customers of tomorrow. 

Ford India too took the cafe route by setting up temporary Fiesta cafes in malls across New Delhi, Mumbai and Bangalore in April to create a build up for the new edition of Fiesta. The cafes wiwill be operational till August end. "It was an opportunity to respond to the high interest for the new Fiesta as the product had not been launched at showrooms," a Ford India spokesperson said. 

Analysts such as Prathish Nair, director-brand strategy & client development at Trancend Brand Consulting, feel that the timing is right for such experience zones. "Consumers are not just buying into a car anymore. They are buying into design sensibilities and legacy, which is why companies need to create an experiential positioning and reflect brand value," says Nair. 

That is why the move may be important for Fiat, which has been struggling in the market. Last year, when India's total car sales increased 30% to 1.98 million vehicles, Fiat's sales dipped nearly 15% to just 21,066 cars. 

Market experts say one of Fiat's problems in India is its image. "Before Fiat entered into a joint venture with Tata Motors, the perception was that the after sales service of Fiat is not good. 

The JV has addressed this and increased dealerships, yet consumers at times carry the old perception," an analyst at a brokerage firm said. 

Fiat now expects the cafes to prop up brand engagement here. "The attempt to increase sales is definitely one of the reasons for opening cafes in India," says Fiat India's Bhatia. "It (cafe) will be the face of Fiat in India."


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