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Tata Motors, Fiat to halt competitive launches

Italy’s Fiat and Tata Motors, locked in a carefully crafted partnership in a competitive industry, will not launch models in segments where they would have to compete with each other.

business Updated: Jun 12, 2009 23:59 IST
Suprotip Ghosh

Italy’s Fiat and Tata Motors, locked in a carefully crafted partnership in a competitive industry, will not launch models in segments where they would have to compete with each other.

The two companies, which are in a wide-ranging tie-up, would have a common strategy to take on competition in India, a top Fiat official told Hindustan Times.

“Between the two of us, beginning with the Nano, we will have a line-up of cars that would pretty much cover that part of the market,” said Rajeev Kapoor, managing director, Fiat India Auto Private Ltd, the Italian major’s local subsidiary.

The decision shows how deep the Tata-Fiat combine in India now runs into the manufacturing functions of the two companies.

Tata Motors is not readying any new car launches in the sub Rs. 8-lakh end of the market other than the Indigo Sedan, Rajiv Dube, president, passenger cars, had told Hindustan Times last month.

The new Indigo sedan is an upgrade over the existing Indigo, where Fiat does not have any models. Fiat will not be launching the high-end Bravo, which is a hatchback originally planned for import into India.

FIAPL and Tata Motors are betting big on the Grande Punto. “It is now time to get into the volume segment. The Punto is going to bring us numbers,” said Kapur.

Grande Punto, FIAPL’s new car, will be priced above Tata’s Indica Vista, but below the Honda Jazz and the Skoda Fabia, Kapoor said.

With the two Fiat cars, the Tata-Fiat combine will have the lower end of India’s car market pretty much covered.

The Tata-Fiat combine has close synergies. Tata Motors gets Fiat’s technology and support. It also gets a share of the numbers that the Linea and Grande Punto make. It gets to manufacture cars in Fiat’s brand new Ranjangaon plant.

Fiat on the other hand gets the reach of Tata Motor showrooms in the country, and the might of Tata Motors over its suppliers means Fiat’s aggressive plan of cutting costs through buying Indian components becomes easier.

“We are looking at very high level of localisation. We will establish the localisation aggressively,” Kapoor said.