Tata Motors is in discussions with Fiat Auto over joint manufacturing, said Chairman Ratan Tata yesterday, while suggesting that in the future the Indian carmaker could become responsible for distributing the Alfa Romeo, Ferrari and Maserati brands.

His comments were made to shareholders during Tata Motors' Annual General Meeting which was held yesterday. The upbeat comments from Ratan Tata, who earlier this year was made a full member of the Fiat Group's Board of Directors, suggest that the negotiations between Fiat Auto and Tata Motors are now spreading much wider in scope and are likely to produce fresh strategies soon.

Last September, Tata Motors and Fiat SpA signed a "Memorandum of Understanding" (MoU) which would “analyse the feasibility of co-operation, across markets, in the area of passenger cars that would encompass development, manufacturing, sourcing and distribution of products, aggregates and components.” The first fruits of this co-operation was an agreement in March to begin jointly selling cars through each other's dealer network. The new Tata-Fiat dealer network comprises 25 existing Tata Motors Passenger Vehicles dealers and 3 existing Fiat India dealers. The 28 Tata-Fiat dealers are now selling the Fiat Palio (1.2 EL PS, 1.2 ELX, 1.6 Sports) and the Fiat Adventure (1.6 Sports), and all Tata Motors Passenger Vehicles – the Tata Indica, the Tata Indigo, the Tata Indigo Marina, the Tata Sumo and the Tata Safari.
 

At the AGM yesterday Ratan Tata said: “The Fiat deal envisages introducing more advanced products in the country. It isn't inconceivable that the current marketing alliance may stretch beyond the Fiat brand and include the other Fiat’s brands including Alfa Romeo, Maserati, and Ferrari. It envisages joint product development, car badging, and technological exchange,” added Tata. The "car badging" scenario could well see Tata producing Fiat branded cars for the Italian carmaker of Fiat producing Tata branded cars for the Indian concern. Fiat's underused plant at Kurla (Mumbai) could well be used to build cars on behalf of Tata Motors.

Meanwhile Tata Motors has just reported a strong sales performance for June with a total sale of 45,223 vehicles (including exports), a growth of 37% over 33,018 vehicles in June last year. The passenger vehicle business reported a total sale of 18,463 vehicles in the domestic market in June 2006, an increase of 27.8% over June 2005. The Indica sold 12,271 nos., a growth of 41% over June 2005. The Indigo family registered sales of 2,885 nos., a decline of 1.7% over June 2005. The Sumo and Safari accounted for sales of 3,307 nos., a growth of 17.5% over June 2005. The new Safari range launched in the latter part of the month enabled the model to cross the 1,000 sales mark in a month for the first time, at 1011 nos.

Cumulative sales of passenger vehicles in the domestic market for the fiscal were 49,906 nos., an increase of 21.2% over last year. Cumulative sales of Indica at 33,173 nos. registered a growth of 32.7% over last year while cumulative sales of the Indigo family at 8,316 nos. registered a decline of 6% over last year. The entry mid-size segment continues to see a decline which started in 2005-06, and the Indigo range has increased its market share in a declining segment. Cumulative sales of Sumo and Safari were 8,417 nos., a growth of 14.6% over last year.