Tata to revitalize its joint venture with Fiat

Tata Motors, one of India's largest car makers, is planning to revitalise its long held partnership with Italy based Fiat group in the Indian market. The company is all set to scale-up the product line of Fiat group in the Indian market along with the adoption of the new engine and transmission technologies. It has been more than three years since Tata Motors has been in partnership with this Italian auto maker, but the partnership hasn't really benefited the Fiat group as per their expectations. The Tata-Fiat joint venture (JV) had been registering heavy losses until recently. In the period of Jun 2008 to March 2010, the JV has reported a cumulative loss of as much as Rs crores. Though the JV has a massive manufacturing plant at Ranjangaon, near Pune, the facility remained underutilized due to the sluggish sales figures and slowing down demand for Fiat cars in India, during the period. 

According to market experts, the performance of the Fiat group could have been better as it has two highly competitive cars in the volume driven segments - Fiat Punto and Fiat Linea. But due to the weak sales and marketing it hasn't been able to capitalize on the competitiveness of these two cars in the Indian market. The company had recently decided not to upgrade its hatchback Fiat Palio as per the new BS-IV emission norms. Palio is one of the oldest cars in the Fiat's India portfolio.

Tata Motors had recently stated that is is not satisfied with the progress of the partnership, however, the company is confident of turning it around. Mr Carl-Peter Forster, chief executive and managing director at Tata Motors, had recently said in a statement that the company is not satisfied exactly where it is right now in terms of volumes, but it is now taking a very strong stand in that business, under the Fiat brand.