Tata Motors, Fiat sign MoU to jointly produce cars

Mumbai, July 25 (UNI) Tata Motors and Fiat Group today announced that they have signed a memorandum of understanding (MoU) to establish an industrial joint-venture in India to manufacture passenger vehicles, engines and transmissions for the Indian and overseas markets.

This MoU comes following the earlier agreement, signed in September last year, between the two about the dealership network arrangement which came into effect from January 13 this year.

Both Fiat and Tata vehicles are expected to be manufactured in the same industrial facility at Ranjangaon in Maharashtra, a joint release said here.

Fiat will introduce, among others, its premium cars for B and C segments (Fiat Grande Punto and the new Fiat sedan) and its successful small diesel engine. The facilities are expected to exceed an overall output of 100.000 cars and 250,000 engines and transmissions.

Fiat and Tata also announced that they have agreed to enter into a 60 days study aimed at exploring industrial and commercial cooperation in Latin America.

The study, in particular, will be focused on different vehicles, especially utility vehicles and pick-ups and on exploring the opportunity of using the existing Fiat production facilities in Cordoba, Argentina. Products manufactured there would be sold in various Latin American and overseas markets under both Fiat and Tata brands, the release said.

While definitive shareholder, licensing and other agreements are being finalised, the signing of the MoU for Indian operations and the study of the cooperation in Latin America reflect a growing commitment of the two organisations to work together and leverage mutual strengths to address key markets through a combined, complementary product portfolio and exchanges of technology.

In his statement, Fiat Group Chief Executive Officer (CEO) Sergio Marchionne said, ''As we said at the time we signed the distribution agreement in India, this is a strategic partnership which is evolving by leveraging on the respective strengths and continuously identifying new opportunities to be jointly exploited.

Not only in India but also on a global scale.'' Ratan N Tata, Chairman of Tata Group and Tata Motors, said: ''This is the beginning of what promises to be a far-reaching, long-term relationship between Fiat Group and Tata Motors. Both companies have complementary strengths, convergent objectives and shared values. Together, we can meaningfully address markets in India and other select geographies, combining technologies, products and human skills of both organisations.'' Fiat is an industrial enterprise focused on the automotive sector, serving customers in more than 190 countries around the world with an annual turnover of about 47 billion euro, while Tata Motors, the flagship company of the Tata Group, is India's largest automobile company, with revenues of US 5.5 billion dollars in 2005-06 and has over three million Tata vehicles plying in India.

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