Tata to examine partnership with Fiat

In order tap the true potential of the joint venture between Tata Motors and Fiat, Tata India Chief Ratan Tata is thinking of examining it. Notably, the tie up has not been as active as Tata had expected and there has been lack of coordination at the working level as impediment.In a recent interview Tata reportedly said that despite his good relations with Sergio Marchionne, CEO of Fiat, Tata Motors and Fiat India jointly could not be as active as expected. Tata also emphasized on the need of introduction of new cars in India by the Italian car maker.

In his statement, Tata further said that Fiat India should bring in more cars in India to keep the brand alive besides putting in efforts to bring down cost of parts and components. Tata is reportedly going to reexamine the joint venture in order to operate at full swing and based on the feedback a decision would be taken. He also emphasized the need of coordination at the working level to make the partnership active. Tata is also said to have expressed that things are not moving at a pace as expected and the primary reason behind it is the lack of coordination at the working level. However, he reportedly denied anything wrong with the partnership and made clear that the partnership would go on.  

Notably, since 2007 when the two companies entered a joint venture they are also sharing the same network and sales spares support in addition to the manufacture of some shared products at Ranjangaon facility near Pune. In due course Tata started selling Fiat cars at it’s showroom but unfortunately Fiat could not become a volume puller as compared to Tata cars India.More recently in order to access the Indian car market directly, Fiat India decided to sell Fiat cars at its own showroom in addition to the cars displayed for sale at Tata showrooms in India. As per an estimate, Fiat could only sell around 21,066 units in 2010-11 compared to over 24,727 units last FY, a dip of 14.81 per cent.