Tata Motors, Fiat to realign Indian joint venture
Tata Motors and Fiat are to realign their Indian joint venture, formed in 2006, to boost sluggish sales of the Italian car maker and further develop the Fiat brand in the country.
May 03, 2012 / 10:15 AM IST
Tata Motors and Fiat are to realign their Indian joint venture, in an attempt to boost sluggish sales of the Italian car maker and further develop the Fiat brand in the country.
Tata Motors was so far managing Fiat's distribution through joint Tata - Fiat dealerships. But now the Tatas will hand over distribution and service for Fiat cars in India to a Fiat group owned company being formed for this purpose.
Fiat and Tata Motors, meanwhile, will continue with their manufacturing facility at Ranjangaon near Pune in Maharashtra, the company said on Wednesday.
Both Fiat and Tata cars are produced at the Ranjangaon plant in addition to engines and transmissions for both the Indian and export market.
Around 190,000 cars and 337,000 powertrains have been produced by the JV in past five years, it said.
Development of new Fiat dealer network for India will start progressively and the 178 Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network, Tata Motors said.
Fiat, which sells the Grande Punto hatchback and the Linea sedan in India, has seen sluggish sales growth in India. Last fiscal (FY12) only 16,095 Fiat cars were sold in India, compared with 21,066 units sold in FY11. In comparison, 313,710 Tata passenger vehicles were sold in FY12, up 5% to highest ever in a year.
Tata Motors shares on Wednesday closed down 3.8% at Rs 304.50 on NSE, after reporting 7% decline in sales in April.