Tata, Fiat auto announce forming a joint venture in India

New Delhi, Dec 14 (UNI) Tata Motors Ltd and Fiat Auto today jointly announced an agreement for the formation of a joint venture between the two companies with an aggregate investments of Rs 4,000 crore which may also exceed and will be made in a phased manner.

The joint venture will start production of engines and new cars progressively from the beginning of 2008 pursuant to the Memorandum of Understanding (MoU) in July 2006.

While legal agreements are being completed, the companies will kick-start the implementation of the projects and further enhance the relationship between the two organisations to leverage mutual strengths through a combined, complementary product portfolio and technology sharing.

''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. I am sure they will be as appealing to Indian customers as they have been to those of Western European markets,'' said Tata Motors Chairman Ratan N Tata.

The agreement calls mainly for the creation and establishment of an industrial joint venture in India, located at the Fiat plant at Ranjangaon in Maharashtra.

With capacities to produce in excess of 1,00,000 cars and 2,00,000 engines and transmissions yearly, at steady state, the Ranjangaon plant will manufacture vehicles for the Indian and overseas markets.

Both Fiat and Tata vehicles will be manufactured at the same facility, which will be managed equally by the two shareholder 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.

A 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.

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.

The engine manufacturing envisages the Fiat 1.3 litre multi-jet diesel engine, the 1.4 litre and a new 1.2 litre gasoline engine, both of the 'Fire' family and Fiat transmissions.

Fiat and Tata are also continuing discussions for industrial and commercial cooperations in Latin America, as per a joint analysis which began in July 2006.

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