Fiat Planning to Alternative for Tata Motors for Distribution and Sales in India

Monday 18 October 2010, 00:00 AM by Payal Pathak

Fiat Motors currently sells its cars through partnership with Tata Motors, which also provides the servicing. Cracks in the three years old joint venture have started to surface, say industry sources. Fiat is now considering to have a separate distribution network from Tata Motors, though Fiat cars will continue to be sold through Tata Motors also.

In 2007, Tata Motors and Fiat India had merged their 100 dealers and 47 dealers across India. Currently, the combined strength is 175 dealers which is slated to be increased up to 200 by the end of the year.

Sources now reveal that Fiat is seriously rethinking on its strategy for the Indian market including ways to increase its sales in the domestic market. Needless to say, Indian auto market is riding on high tide with sales booming each month and nearly every auto maker posting double digit growth. However, Fiat sales have not picked up much in the year. It had planned to sell 4000 units of its models including Linea and Punto but has not managed to sell even half of the initial target despite all time high market sales.

One of the identfied reasons for lagging sales is underwhelming service by the Tata Dealerships. Fiat hence now considers to set up its own pan-India distribution network gradually and simultaneously maintain its exisiting shared dealerships with Tata Motors.