The comments by industry veteran Forster, who previously worked at BMW and GM Europe, came at an event in Bochum, Germany where he told Bloomberg of his concerns about the joint venture, reported Mumbai news agency, Daily News & Analysis (DNA).

His remarks come as FIAL hastily evaluates its options as the 50-50 joint venture as its sees sales tumbling rapidly. For the full year of 2010 FIAL's sales reached 15,184 units, down almost three thousand units compared to 18,065 units in 2009 when both its current models, the Linea and Grande Punto, were launched, in the first quarter and mid-year respectively. For the last month of available sales data - December 2010 - Fiat India sold just 271 cars, which compares unfavorably with December 2009 when it shifted 1,007 cars. By contrast Tata Motors' own operations saw strong growth in India last year: 208,697 units, and when compared to 153,939 units in 2009, that equates to a hike of more than fifty thousand units year-on-year and a rise of around 30 percent. Tata's own-brand December sales were up by more than a third year-on-year.

FIAL was set up on October 11, 2007, and currently employs around 2,235 staff. It is located at the former Fiat factory at Ranjangaon in the Pune District of Maharashtra which was handed over to the joint venture. The board of directors for this JV company comprises of five nominees each from Fiat and Tata. The state-of-the-art facility at Ranjangaon is capable of producing 200,000 cars and 300,000 engines as well as 300,000 transmissions and accessories. The facility manufactures Fiat Powertrain's 1.3 litre Multijet diesel engine and the 1.2/1.4 litre FIRE gasoline engine.

Fiat's inability to grasp the pulse of Asia is the stuff of legends and the prospective market position it threw away with the original Uno in India is one of the deepest-rooted tales of caution of the local automotive industry. The story is the same in China where Fiat is embarking on a new joint venture in the hope of making an impact in the world's biggest new car market where most of its rivals have been generating volumes for a decade. The joint venture with Tata Motors was always a difficult proposition to make work from all sides from the start and part of the problem stems from many of the Tata dealers' which rolled out Fiat co-branding, less than enthusiastically embracing the project.

Fiat hasn't fully addressed building its brand image while there are negative quality and aftersales perceptions of the Italian carmaker in India, although it does have a loyal niche following. The Linea and Grande Punto were both enthusiastically received by the Indian media at their respective launches in 2009 but the momentum of having two quality products to entice consumers into the showrooms simply wasn't built upon. Fiat is famous for its over enthusiastic targets and it is the same story in India as everywhere else: for 2010 management optimistically targeted selling 50,000 units, falling short of this dreamlike figure by around 35,000 units. To combat its falling sales FIAL has recently called in management consultants Accenture to conduct a thorough review of the company and has talked about creating standalone points of sale in more consumer-targeted zones such as shopping malls. FIAL also launched the 1.4 T-Jet version of the Linea in India last autumn to give the sedan a more upscale offering.