Fiat are presently in negotiations with Tata Motors which will see the former's underused factory at Córdoba in Argentina brought back to full life building a range of utility vehicles after receiving a US$100 million investment. The news that Fiat and Tata Motors were discussing a joint-operation at Córdoba was revealed in July and an announcement on a timeline is expected next month.

The plan proposes that the factory will begin assembling a range of "utility" vehicles targeted at the Argentinean market and for wider South American export. The products will most likely be a pick-up and light truck. This will relieve pressure on Fiat's giant plant at Betim in Brazil, which last month celebrated its 30th anniversary, and it emphasises the growing importance of Argentina to major carmakers. This new focus follows an announcement last Thursday by GM that they plan to raise production at their plant located at Rosario by 40 percent, another sign of the changing nature of the Argentinean market. Fiat Auto wound down production of the Project 178 "World Car" family Palio and Siena models at Córdoba a few years ago when Argentina entered a period of financial instability after defaulting on international loans. Currently the Córdoba factory is gearing up to manufacture a new version of Fiat's 1.8-litre "Torque" engine now that Italian production of this unit has ceased, and also to build a gearbox for PSA Peugeot-Citroën.

Fiat have a long tradition in Argentina, first selling cars there in 1919. In 1954 Fiat's first manufacturing venture began with the production of tractors while six years later car assembly got underway with the Fiat 600D at a brand-new factory in Caseros. By the mid-1960s Fiat had taken the top sales spot in Argentina.
 

A whole string of Fiat models, including several developed specifically for the local market, were manufactured in Argentina during the latter half of the 20th century; the 600D being immediately followed by the 1100 (1960); 1500 (1963); Coupé 1500 (1965); 800 (1966); 1600 (1969); Coupé 1600 (1970); 128 (1971); 125 (1972); 133 (1977); 147/Spazio (1982); Regatta (1985); Brio and Duna (1987); Uno and Fiorino (1989); and finally the Palio and Siena in 1997. An embracing partnership with Peugeot which was formed in 1980 was dissolved in the mid-1990s and Fiat immediately set about building a new factory at Córdoba. Production at the new plant began in December 1996, just 18 months after groundbreaking. Daily two-shift capacity at the US$600 million factory was scheduled for 560 cars per day, made up of a mix of Siena and Palio models.

For Tata Motors the Córdoba facility offers the Indian carmaker the opportunity to expand their production and distribution to South America. Tata Motors, led by ambitious Chairman Ratan Tata, has experienced strong growth in recent years. Last week Tata Motors announced that their July 2006 sales were up 44.5 percent year-on-year, following a recent major upward trend. Two Tata models being considered for production are the Tatamobile and Tata Sumo.

The Tatamobile - a light pickup - was launched in 2002; a sports utility truck variant was introduced in 2005. Tata Motors plans to introduce an all-new version in 2007. It will be based on a new platform with CRDi engine technology as a possible option in the pipeline. The Tatamobile has been exported to countries such as South Africa, Turkey, Italy, Spain, Sri Lanka, and the Middle East. Tata Motors is now targeting new markets such as Russia, Egypt and North Africa. It is expected that whichever models are built at Córdoba will be branded by Fiat and Tata separately.