Fiat plans to split from Tata's distribution network
Published On Oct 12, 2010 11:06 PM By Meenal
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With tensions surfacing the Tata motors and Fiat's three years JV( joint venture), the latter has decided to detach its distribution network from the former. Whereas considering the broader impact of the JV, all other tie-ups except joint dealership will continue like joint production of vehicles.
The Italian manufacturer was dissatisfied on receiving the sales statistics which became a reason for it to reconsider its Indian strategy. As the company estimated their total sales to be more than 4000 units for its Fiat Linea and Fiat Grand Punto, it has hardley attained half of the expected number. The italian carmaker foresighted an increase in sales of its cars in the current portfolio and expand the same by adding newer varaints, all this spread over the next 12 to 18 months. Fiat’s short-term objective is to increase sales of its existing car lines and also incorporate future variants and new models that are planned over the next 12-18 month period. An e-mailed query to a Fiat spokesperson did not elicit any response till the time of going to the press.
As per the sources, Fiat is soon going to set up its own distribution network in India and simultaneously maintain its existing shared dealerships with Tata Motors. The prior goal of the Italian car maker is to expand the sales of its existing models with a secondary aim of launching the new models.
Fiat presently shares its manufacturing facility with Tata at Ranjangaon in Maharshtra. The facility has to capacity to manufacture 200,000 cars and 300,000 engines of which, some are sent to Fiat plants overseas. The Italian carmaker currently manufactures Fiat Linea and Fiat Grande Punto at its facility.
It is conjectured that the merger between the two companies which was signed in 2007 with Fiat's 40 dealers and Tata's dealer network of over 100 will be affected with the advancement of the Italian car maker. Talking of the present joint dealership it stands at 175 which is soon going to hit 200 dealers by the end of the year.
Fiat has gained INR 22 crore as profit in the first quarter as against INR 166 crore loss for the same period, an year ago.
