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Tatas re-examine Fiat partnership

autos Updated: Jun 15, 2011 02:02 IST
HT Correspondent
HT Correspondent
Hindustan Times
Tata Group

Frustrated at the relative lack of success, Tata Group chairman Ratan Tata has said that the 4-year-old Tata Fiat joint venture needed to be critically examined and that the Italian car maker needs to launch many more models in India.

In a recent interview to market research firm JD Power, Tata said the potential of the joint venture for growth is still good and there was no reason to give up.

"... I have to admit that so far, the venture with Fiat has not been as active as we had thought," Tata said. "...I think that Fiat has to launch more models to keep dealers interested. It also has to look at its cost structure in terms of parts and components. The JV needs to be looked at critically and until that happens, it's not going to be optimised."http://www.hindustantimes.com/images/HTPopups/140611/15_06_biz25b.jpg

The two came together to form a joint venture, Fiat India Automotive Ltd, in 2007 but the JV has been struggling since then. While the Indian passenger car industry surged 30% to clock 2.0 million units last fiscal, Fiat's sale dropped 15% to 21,066 units.

"As far as what else we can do with Fiat, I think Sergio Marchionne and I can really talk to each other. However, at the working level, it hasn't quite been that way. We have looked at Latin America to do something together, but things haven't moved as they should have done," Tata said.

He, however, ruled out giving up on the partnership, saying "... I think there's nothing wrong with the concept of the deal - it is a very healthy concept."

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