October 12, 2007 | The Hindu

Fiat, Tata Motors form industrial joint venture

Fiat Group Automobiles and Tata Motors on Thursday signed a definitive agreement for the establishment of an industrial joint venture, located at Ranjangaon in Maharashtra to manufacture passenger cars, engines and transmissions for the Indian and overseas markets. The assembly of the new Fiat Palio at Ranjangaon has already commenced.

According to a Tata Motors' statement, the joint venture will make Fiat's premium cars, Grande Punto and Linea (in the B and C segments, respectively) its successful 1.3-litre multijet diesel engine, its 1.2 and 1.4-litre fire gasoline engine and matching transmissions. The joint venture will also manufacture one of Tata's next generation vehicles. At full capacity, the Ranjangaon facilities are expected to exceed an overall output of one lakh cars and two lakh engines and transmissions. The overall investment will exceed 650 million euro and the plant will directly and indirectly employ more than 4,000 people.

The distribution and service of Fiat branded cars in India will continue to be managed by Tata Motors in line with the agreement signed in March 2006. The Tata-Fiat dealership network, which is now distributing and servicing the Fiat Palio, today numbers 65 dealers and is meant to expand to 100 dealers by mid-2008, when the new Fiat models are expected to be launched.

The joint venture will be governed by a board of directors with equal representation from the two partners. The managing director of Tata Motors, Ravi Kant, will be the chairman of the joint venture.

The vice-chairman will be Alfredo Altavilla, the CEO of Fiat Powertrain Technologies and senior vice-president (business development) of Fiat Group Automobiles. Rajeev Kapoor has been appointed the president and CEO of the joint venture. He will be in charge of the operations of the new entity and will be responsible to the board of directors of the joint venture. Commenting on the signing of the agreement, Alfredo Altavilla, CEO, Fiat Powertrain Technologies and senior vice-president, business development, of Fiat Group Automobiles, said, "The signature of the joint venture in India and the continuous development of new opportunities confirms the strong motivation and understanding between Fiat Group and Tata Motors."