Sunday, May 06, 2012: 07:53:16 AM

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Fiat-Tata Motors end JV

The joint venture agreement between Tata Motors and Fiat over distribution and services was brought to an end by the two auto majors

Leading auto brands Fiat and Tata Motors have concluded their distribution alliance that had commenced in 2007. The pact had encompassed the distribution and servicing of vehicles of the Italian auto major. After the culmination of the agreement, Fiat will look into sales, marketing and service activities solely as a part of its realignment process.

The 50:50 joint venture entailed a joint distribution network for both the companies as well as back end support and co-manufacturing of products at the Ranjangaon facility near Pune in Maharashtra.
Developing Fiat as a brand
In a joint statement to the media by both the companies, it was stated that the move was in keeping with the development wherein Fiat will develop as an individual brand in India. It was further notified that the management control of Fiat’s commercial and distribution activities would be undertaken by a separate Fiat Group owned company.
Until now Tata Motors has been managing the distribution responsibility of the Fiat branded products in India through joint Tata-Fiat dealerships. In its 5 years of operation, the industrial JV produced nearly 190,000 cars and 337,000 powertrains. However, the pact will see the JV continue with its manufacturing activities at Ranjangaon, as it is not included in the new distribution agreement. It will supply cars and powertrains to Fiat and Tata, according to the statement.
Tata Group chief Ratan Tata had said last year that the Fiat association needed to be critically examined to optimise its potential. Shedding more light on the future of Fiat in India, the press statement highlighted that Fiat will establish a separate company which will assume responsibility for all commercial and service related activities from the current Tata-dedicated team assigned to manage the Fiat brand. Both the auto giants will strive to ensure a smooth transition of sales and service support to customers and the dealer network, it was added.  
Priyanka Roy Chowdhury

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