Fiat tie-up with Tata motors

Fiat tie-up with Tata motors

After partnerships with Ford motors, Peugeot and a Turkish and Russian automaker Fiat has now tied up with Tata motors in India. The announcement came on December 14 as the two company’s plan to invest more than $887 million over the next two-to-four years in making cars, engines and transmission was unveiled. These units will be made at the Fiat plant in Ranjangaon in the western Indian state of Maharashtra.

The Ranjangaon has an annual capacity of over 100,000 cars and 200,000 engines and transmissions and will be both Fiat and Tata vehicles for the Indian and overseas markets, particularly Latin America. "India will be a more strategic country for us," said Fiat's Alfredo Altavilla, senior vice-president of business development. "Our previous period here was not successful."

The deal will be mutually beneficial as Fiat will be able to resolve their marketing and distribution problems in India and Tata motors will have access to Fiat's diesel technology, auto parts expertise, and design savvy. Chairman Ratan Tata said the deal "enables Tata Motors to access world-class powertrains from Fiat for its next-generation car offerings, while enhancing the model line at its dealerships."

Fiat India had also launched other models like the Palio, Uno and Siena. But as Fiat could not support its dealers and products adequately both the Siena and Uno have ceased manufacturing, and the Palio is Fiat's mainstay. With the Tata partnership in place, Fiat now wants to make its Grande Punto and Linea (the latter made its debut at the Istanbul motor show last month) from its new plant at Ranjangaon.

The new deal between the Italian and the Indian automakers is a welcome sign for the Indian automobile market. We can be sure about expecting better cars from this join effort being introduced in India.

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