Fiat and Tata have mutually agreed that the distribution and commercial activities of the former will be handed to a separate company owned by Fiat. The main reason behind this agreement is to develop the Fiat brand in India, which is currently managed by Tata. All Fiat products are currently distributed in India by Tata Motors through joint Tata-Fiat dealerships.
In order to lay main focus on the Fiat brand and as a part of the growth plan, the distribution and service responsibility for Fiat cars would be handed over to Fiat Group owned company. The Fiat-Tata joint venture announced in the year 2006 has resulted in a manufacturing unit at Ranjangaon in the State of Maharashtra.
Fiat and Tata cars are manufactured in the production unit along with transmissions and engines for both domestic and international market. In order to supply Small Diesel Engine to Maruti Suzuki, the company has recently announced a contract. Around 190,000 cars and 337,000 powertrains have been produced by the joint venture in its five year of operation.
Being outside of the new distribution agreement, it will continue with these production activities. Further, power trains and cars would be supplied to Tata and Fiat. Steps would be taken for developing new Fiat dealer network in the country. The existing 178 Fiat-franchised Tata dealers in 129 cities would be motivated to build the foundation of the network for the future. Smooth changes in terms of sales and service support would also be made by Fiat and Tata.
