Tata-Fiat set to double car capacity at Ranjangaon
Business Standard — December 5, 2007

Sizeable chunk of vehicles produced here will be exported

The Tata-Fiat combine's plant at Ranjangaon, Maharashtra, may see huge capacity additions as new models line up to go under production at the site.

There may, however, be no fresh infusion of funds as both the companies have already earmarked a sum exceeding Rs 4,000 crore as a joint investment for the project.

Tata Motors and Fiat Auto each own 50 per cent in the venture. The planned investment encompasses all the initiatives to be taken by the companies.

"We may increase the plant's production capacity beyond 200,000 cars and 300,000 engines and transmissions annually," said the newly-appointed President and CEO of Fiat India Automobiles, Rajeev Kapoor.

This will double the plant's car production capacity from 100,000 units per annum presently to 200,000 units and also increase the production of engine and transmission units by 50 per cent to 300,000 units.

The Ranjangaon plant will produce an array of cars from the Tata and Fiat stable. The plant has already started production of Fiat's compact car Palio since the start of this year.

Many such small cars, including the new generation Indica and Indigo from Tata Motors and the Grande Punto and Linea sedan from Fiat Auto, will be produced from here. This will be in addition to the future cars that both companies have planned to launch in India.

The plant is also well equipped to handle exports which will form a sizeable chunk for both companies. Car units, engines and transmissions produced at the plant will be exported to various world markets, which include regions in Latin America where both the companies are conducting industrial and commercial cooperations.

Though the manufacturing expertise of the JV, will purely rest with Fiat, marketing activities of all the produced cars will be handled by Tata Motors.

"The marketing of cars will rest with the Tatas and will not be our responsibility, we will not do anything in that (marketing) sector," said De Filippis Giovanni.

"The production line at Ranjangaon is very flexible. We can produce Tata branded cars besides our own," said Giovanni.

To exercise uniformity in management, both the companies have proposed to appoint five members to the board of ten, which will take over the management by the end of this month.

Tata Motors', Managing Director, Ravi Kant is the chairman of the board, with Alfredo Altavilla, the current senior vice president (Business Development) of Fiat being the new vice chairman of the JV.

Fiat had shut its Kurla plant in Mumbai and moved to Ranjangaon almost two years ago, but due to some reasons actual production from the plant got delayed. Tata Motors then picked up 50 per cent equity in the plant and assured a contribution of Rs 2,000 crore in December last year.

The as yet unnamed entity has seen one of the largest joint equity contributions in the country in the automobile space.