Fiat and Tata Motors Explore Strategic Alliance

22 September 2005

As rumored and expected, Fiat and Tata Motors have signed of a Memorandum of Understanding (MoU) to analyze the feasibility of cooperation in the development, manufacturing, sourcing and distribution of passenger cars and components.

The two companies are establishing a joint team to determine the feasibility and specificity of the nature of cooperation, both in the short and long term. If found feasible, the two companies will enter into definitive agreements in the course of the coming months.

Fiat just two weeks ago signed an MoU with Ford for the joint development of a future small cars in Europe. The two new vehicles that would be involved, with highly differentiated designs, would be a new Fiat 500 and a replacement for the current Ford Ka. (Earlier post.)

Tata Motors is India’s largest automobile company, with revenues of US$ 4.7 billion. The company is a market leader in commercial vehicles in India and amongst the top three players in the passenger car industry. It is the world’s fifth-largest medium and heavy commercial vehicle manufacturer.

Tata plans to have hybrid prototypes of its Indica and Indigo) and hybrid buses ready over the next six months. The company is also working on a fuel cell bus, the prototype of which will be ready over the next one-and-a-half to two years. (Earlier post.)