Tata Motors and Fiat have agreed to re-align their Indian joint venture. This re-alignment is in order to further develop the Fiat brand in India. The management control of Fiat’s commercial and distribution activities will be handed over to a separate Fiat Group-owned company. Currently Tata Motors has been managing the distribution responsibility of the Fiat branded products in India through joint Tata Motors-Fiat dealerships. As part of the growth plans and in order to provide greater focus on the Fiat brand, Tata Motors will hand over the distribution and service responsibility for Fiat cars in India to a Fiat Group-owned company being formed for this purpose.
Announced in 2006, the Fiat-Tata Motors joint venture also encompasses manufacturing activities located in Ranjangaon in Maharashtra. The manufacturing plant uses state-of-the-art technology to produce Fiat and Tata Motors cars in addition to engines and transmissions for both the Indian and the export markets and recently clinched a contract to supply its small diesel engine to Maruti Suzuki. It will continue with these manufacturing activities as they are outside of the new distribution agreement and will supply cars and power-trains to Fiat and Tata Motors.
Development of the new Fiat dealer network for India will start progressively and the 178 existing Fiat-franchised Tata Motors dealers in 129 cities will be encouraged to form the foundation of the future network.
Besides, Fiat will establish a new, separate, company which will assume responsibility for all commercial and service-related activities from the current Tata Motors-dedicated team assigned to manage the Fiat brand. Both, Fiat and Tata Motors will endeavour to ensure a smooth transition of sales and service support to customers and the dealer network.
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