News Hour- Fiat and Tata Motors end distribution pact in India

MUMBAI: Fiat and Tata have agreed that, in order to further develop the Fiat brand in India, 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-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 joint venture also encompasses manufacturing activities located in Ranjangoan in the State of Maharashtra, India. The manufacturing plant uses state-of-the-art technology to produce Fiat and Tata cars in addition to engines and transmissions for both the Indian and export market and recently announced a contract to supply its Small Diesel Engine to Maruti Suzuki. In its five years of operation, the industrial JV has produced some 190,000 cars and 337,000 powertrains. It will continue with these manufacturing activities as they are outside of the new distribution agreement and will supply cars and powertrains to Fiat and Tata.

Development of the new Fiat dealer network for India will start progressively and the 178 existing Fiat-franchised Tata dealers in 129 cities will be encouraged to form the foundation of the future network.

Fiat will establish a new, separate, company which will assume responsibility for all commercial and service related activities from the current Tata-dedicated team assigned to manage the Fiat brand.