Fiat Auto and Tata Motors announced the formation of their joint venture in India, located at the Fiat plant at Ranjangaon, in the State of Maharashtra.
The Ranjangaon plant—with capacities to produce in excess of 100,000 cars and 200,000 engines and transmissions yearly—will manufacture vehicles for the Indian and overseas markets. Both Fiat and Tata vehicles will be manufactured at the same facility, to be managed equally by the two partners.
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 Auto will also introduce its premium cars for the B and C segments—the Fiat Grande Punto, and the Fiat Linea—into the Indian market.
Manufacturing of Tata cars in the joint venture will supplement the production capacities of the Tata Motors Car Plant in Pune to meet growing demand and to prepare for new Tata car models.
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 from 42 for the launch of the new models.
The plant will manufacture the Fiat 1.3-liter multi-jet diesel engine, the 1.4-liter and a new 1.2-liter gasoline engine, both of the Fire family, and Fiat transmissions.
The aggregate investments in this industrial joint venture will be made in a phased manner and may exceed Rs.4000 crores (more than €665 million / US$874 million). The joint venture will start production of engines and new cars progressively from the beginning of 2008.
Fiat and Tata are also continuing discussions for industrial and commercial cooperations in Latin America, as per a joint analysis which began in July 2006.
Separately, Tata said that it is looking at options to launch commercial vehicles and a passenger car range in China, preceded by a manufacturing plant.
“From the sourcing and selling point of view, China is both fascinating and seductive market... And we have been looking at this market for the last two years,” Tata Motors Managing Director, Ravi Kant, told PTI here.
Tata Motors is India’s largest automobile company, with revenues of US$ 5.5 billion in 2005-06. With more than 4 million Tata vehicles on the road in India, it is the leader in commercial vehicles and the second-largest in passenger vehicles. It is also the world’s fifth-largest medium and heavy truck manufacturer and the second-largest heavy bus manufacturer.