Indian newspaper reports last week have suggested that Fiat Group CEO Sergio Marchionne is discussing a major new industrial agreement with Tata Motors.

Marchionne is well known to be locked in discussions with potential automotive sector partners in India as Fiat Auto looks to re-launch its car operations there, and build a regional manufacturing hub in a country which offers potentially huge new market opportunities. Tata Motors is just one part of the huge Tata industrial conglomerate, India's largest private sector organisation, which is controlled by a family of industry tycoons who are also close friends of the Agnelli family, Fiat's key shareholder group.

The Tata Group consists of more than eighty different companies operating in seven distinct sectors. Operational areas include engineering, materials, energy, chemicals, finance, communication and IT, tourism, consumer products and services. The IT division, TCS, in fact last December concluded a major new agreement with Scuderia Ferrari to provide information technology and engineering services for the development of the team's future F1 cars.

Established in 1945, Tata Motors immediately entered into a collaboration with Daimler Benz of Germany in 1954 to manufacture commercial vehicles. The collaboration ended fifteen years later in 1969.

Tata Motors has since grown steadily from strength to strength. The company has spread its manufacturing facilities across India by setting up plants at Jamshedpur, Pune and Lucknow. In 2003 Tata reached he threshold of three million vehicles produced per year, while the next year saw the firm buy the former Daewoo industrial vehicles division. Tata, are now planning to launch a 'super economy' car, which will cost around just 1,600 euros.

Today, with more than 130 models on sale, spanning a wide range of Commercial Vehicles, Passenger Cars and Multi-Utility Vehicles, Tata are the leading regional player. This production capacity is coupled with a nation-wide sales, service and spare parts network. The firm enjoys a significant demand in export markets like Europe, Australia, South East Asia, Middle East and Africa. The Company's vehicles are seen in all the continents, and recently their Indica V2 was rebadged by MG-Rover and sold in the UK as a 'Cityrover'.
 

In his new year address to employees Tata Group Chairman Ratan N. Tata was in upbeat mood, "We achieved the highest-ever levels of sales and profits," he said, "we floated India’s largest initial public offering with our TCS public issue; and we became the largest Indian business group in terms of our market capitalisation. These achievements should be a matter of great pride and satisfaction to us all, and have only been possible because of your commitment and support throughout. 

"While several Tata companies achieved growth in sales and market share in India, there was also significant overseas expansion by some of our companies in 2004. For example, Tata Motors made a serious entry into the UK, European and African markets in both passenger cars and commercial vehicles, and acquired the Daewoo Commercial Vehicle Company in Korea, which will significantly enhance their product range and open up new market opportunities in India and abroad.

"Tata Steel finalised the acquisition of NatSteel in Singapore, which will give them a market presence in several Asian countries. The Taj hotels expanded their overseas operations, and Tetley Tea continued to register impressive growth and increased global market penetration. VSNL succeeded in their bid to acquire the global optical fibre undersea cable network of Tyco, which will provide them with enormous capacity for broadband and data connectivity. And together, Tata Steel, Tata Power and Tata Chemicals are considering major investments in Bangladesh, slated to be the biggest ever in that country.

"As we face the future, let us continue to display the “Tata spirit” in striving for excellence and rising to challenges as we have done before. Let us be more aggressive in incorporating international expansion possibilities in our growth plans," Ratan Tata concluded.