August 30, 2003
Car major Fiat and cricket legend Sachin Tendulkar are not speaking yet. But the writing is on the wall. Master-blaster Tendulkar’s contract is up for review and if Fiat insiders are to be believed, the Italian car major is in two minds to renew his Rs 3-crore-a-year endorsement contract. ‘‘I can just say that Tendulkar’s contract is ending this year-end and no decision has been taken as yet whether to renew it or not,’’ a non-committal Fiat spokesperson told The Indian Express. The contract with Tendulkar was signed two years ago by Fiat to prop up the sales of Palio.
Interestingly, the new Palio NV campaign launched this week, does not feature Tendulkar and focuses on the fuel-efficiency aspect. Industry sources say the failure of Tendulkar’s signature car S-10 failed to enthuse Indian customers and at persent Fiat dealers are offering up to Rs 1.5 lakh discount on the car. The company had made 500 S-10 cars which were dumped on to the dealers who are finding it very difficult to move the stocks. Against this backdrop, the company is divided over renewing the contract which entails a substantial hike in the salary of Tendulkar. The loss-making company (it made a loss of Rs 1200-crore last year) has also taken a Rs 1.10 crore hit by picking up the customs duty tab of a Ferrari which was gifted to the star batsman by the Formula 1 racing star Michael Schumacher. This was in addition to Rs 80 lakh paid by the Indian company to buy the made-to-order car.
Besides industry sources say Tendulkar’s contract with Fiat did not have the exclusivity clause which made Tendulkar to sell TVS bikes also. Usually, advertising analysts say a brand ambassador should not endorse another brand from the same industry.
Fiat makes hatchback Palio NV and mid-sized Siena in India. With the launch of brand new Palio NV Fiat India is looking at selling around 1,000-1,500 Palios per month. The company, sold 962 units in July, out of which the Palio accounted for 800 units. Of this, petrol cars are contributing around 70 per cent of total sales while the rest are diesel cars. The new Siena is produced on demand which is around 50-70 units per month.
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