Fiat's long-struggling
joint venture in India with Tata Motors is set to be
unpicked further with the news that the brand's
commercial, distribution and servicing activities are
now set to become the responsibility of Fiat.
"Fiat and Tata have agreed that, in order
to further develop the Fiat brand in India, management
control of Fiat’s commercial and distribution activities
will be handed over to a separate Fiat Group owned
company," read a statement jointly issued by Fiat and
Tata Motors. "Currently Tata Motors has been managing the
distribution responsibility of the Fiat branded products
in India through joint Tata-Fiat dealerships," it
continued.
"As part of the growth plans and in order
to provide greater focus on the Fiat brand, Tata Motors
will hand over the distribution and service
responsibility for Fiat cars in India to a Fiat Group
owned company being formed for this purpose," added the
press release.
Fiat's passenger car
sales continue to be under pressure in India, a key
global growth market. Tata Motors has just reported
sales of 1,000 Fiat models during April, which
represents a halving of the brand's sales when compared
to the same month last year when Fiat sales came in at
2,049 units.
Announced in 2006, the Fiat-Tata joint
venture also encompasses manufacturing activities
located in Ranjangoan in the State of Maharashtra,
India. The manufacturing plant uses state-of-the-art
technology to produce Fiat and Tata cars in addition to
engines and transmissions for both the Indian and export
market and recently announced a contract to supply its
Small Diesel Engine to Maruti Suzuki. In its five years
of operation, the industrial JV has produced some
190,000 cars and 337,000 powertrains. It will continue
with these manufacturing activities as they are outside
of the new distribution agreement and will supply cars
and powertrains to Fiat and Tata.
"Development of the new Fiat dealer
network for India will start progressively and the 178
existing Fiat-franchised Tata dealers in 129 cities will
be encouraged to form the foundation of the future network,"
said the Fiat-Tata statement. "Fiat will establish a new, separate,
company which will assume responsibility for all
commercial and service related activities from the
current Tata-dedicated team assigned to manage the Fiat
brand. Both, Fiat and Tata will endeavor to
ensure a smooth transition of sales and service support
to customers and the dealer network."
