Tata-Fiat JV revs up for Rs 4,000-crore investment
The Indian Express — December 15, 2006

The partnership between the Tatas and Italian car giant Fiat has taken off to the next level with both the sides announcing the formation of a joint venture with aggregate investments of over Rs 4000 crore (over euro 665 million) in a phased manner. This will be the third major automobile investment — after GM and Volkswagen —- in Pune announced in the last one year.

The agreement between Tata Motors and Fiat calls for the creation and establishment of an industrial joint venture in India, located at the Fiat plant at Ranjangaon, Pune, Maharashtra. "With capacities to produce in excess of 100,000 cars and 200,000 engines and transmissions yearly, at steady state, the Ranjangaon plant will manufacture vehicles for the Indian and overseas markets," said Ravi Kant, MD of Tata Motors.

Both Fiat and Tata vehicles will be manufactured at the same facility, which will be managed equally by the two partners. "Fiat Auto will introduce its premium cars for the B and C segments, namely the Fiat Grande Punto, and the Fiat Linea whose worldwide premiere occurred at the Istanbul Motorshow in early November," Kant said.

Said Ratan N. Tata, chairman of the company: "This strategic alliance with Fiat enables the two companies jointly to present a wider range of product offerings to the Indian market. It enables Tata Motors to access world-class powertrains from Fiat for its next generation car offerings while enhancing the model line at its dealerships." The Tatas and Fiat kicked off their partnership with the former marketing Fiat cars last year.

According to Kant, the first assembly line for Fiat cars at Ranjangaon plant has already been commissioned for Fiat Palio and Fiat Adventure models and trial runs have already commenced. The first batch of cars will roll out in early 2007. "Now Fiat will not produce cars at its Kurla plant," said a company official.

Fiat branded cars will be distributed by Tata through the Tata-Fiat dealer network as per the arrangement already in place since March 2006. The Tata-Fiat dealer network will progressively increase to 100 outlets for the launch of the new models to cover the entire length and breadth of the country.

Currently, 42 Tata-Fiat dealerships are already operational. Manufacturing of Tata cars in the joint venture will supplement the production capacities of the company's car plant in Pune.