Tata, Fiat JV to produce 100,000 cars per year
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Tata, Fiat JV to produce 100,000 cars per year

Friday, 15 December 2006, 06:00 Hrs
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Mumbai:India's top vehicle maker Tata Motors Thursday announced a "strategic alliance" with Italian auto giant Fiat to produce over 100,000 cars a year.

The joint venture would start production of over 100,000 cars and 200,000 engines at its new plant at Ranjangaon in Maharashtra from the beginning of 2008. The JV company would also build a small diesel engine and transmissions, Tata Motors said in a statement.

The two companies had in July formed a joint venture to make and distribute cars of both firms.

"The aggregate investments in this industrial joint venture will be made in a phased manner and may exceed 40 billion (4,000 crores - $895.7 million), the joint venture will start production of engines and new cars progressively from the beginning of 2008," the statement said.

The JV announcement comes days after the Italian auto giant got the approval from the Foreign Investment Promotion Board to invest 20 billion in India to set up a new plant at Ranjangaon.

The plant, the company said, would manufacture vehicles for the Indian and overseas market. And both Tata and Fiat vehicles will be manufactured at the plant, 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 took place at the Istanbul Motorshow last month.

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 company said.

"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," the statement said.

Currently, 42 Tata-Fiat dealerships are operational.

"Manufacturing of Tata cars in the joint venture will supplement the production capacities of the company's car plant in Pune to meet growing demand and to prepare for new Tata car models," it added.

"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," said Tata Motors chairman Ratan Tata.

"Fiat's current cars are attractive in their styling and impressive in their performance. I am sure they will be as appealing to Indian customers as they have been to those of Western European markets."

Source: IANS
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