As Fiat and Tata Motors unveil an additional 13 jointly branded dealerships in India this week comes confirmation that Fiat Auto will supply engineering input to both Tata's proposed affordable new Rs 1 lakh car and the forthcoming replacement for the current Indica model.

Tata Motors reportedly feel that Fiat Auto's expertise can help smooth the process of bringing the new Rs 1 lakh car (codename X1) to the market within budget. The ambitious project is core to Tata Motors strategy and bringing Fiat technology into the equation had to be feasible without escalating the cost of the project. A brand new production facility in West Bengal is currently taking shape and production of X1 is slated to start in 2008. Tata is targeting 500,000 sales for the car during its first year on sale and 1 million a year by the end of the third year. X1 pre-production prototypes are already running at the carmaker's Pune factory.

Fiat, who earlier this month announced new plans to assemble the new B-segment Grande Punto and C-segment Linea models at their factory in India, will also have engineering input and technology for Tata's next-generation Indica, the firm's best-selling compact model. Codenamed X3, the new Indica will be positioned at the top end of B-segment and will utilise Fiat's chassis technology as well as sourcing several of its powerplants. These are set to include the highly regarded 1.3 Multijet 16v unit, and the two new FIRE petrol engines, a 75 bhp 1.2 litre and 95 bhp 1.4 litre 16v.
 

This week Tata have also marked down the entry level price of the Indica range by Rs 25,000 when they launched the new cost-effective 1.2 litre Indica V2 Xeta, with a competitive price tag of Rs 2.27.

Meanwhile Fiat India Pvt. Ltd. last week unveiled an additional 13 new dealerships, all of which are jointly-branded with Tata Motors. This adds to the existing 28 joint dealerships that have been rolled out since March this year and now bring the total up to 41. Fiat also has 39 exclusive dealerships of its own spread across India. Fiat India said in a statement: "The latest move is in sync with its strategy to streamline operations and the rapidly changing and developing Indian economy. Fiat India will primarily focus on bettering the availability of cars and quick, efficient after-sales service as per Fiat’s international standards."

During the announcement Giovanni De Filippis, the Managing Director of Fiat India Pvt. Ltd., commented, “Fiat is in the process of building a strong foundation through deeper penetration in the country. This will bring us closer to our consumers and enable us to serve them better. These Tata-Fiat dealers will also streamline our after sales services.”