Fiat, Tata in talks to produce, sell cars

Fiat, Italy's largest manufacturer, is in talks with Tata Motors for a wide-ranging car-building alliance.The two companies will study ways to develop and produce cars together and cooperate on selling their products, Turin-based Fiat said.

"The agreement we have reached with the Tata group represents another step in our strategy to seek targeted accords in the auto sector, realized in successful alliances with partners such as PSA Peugeot Citroen and Suzuki," Chief Executive Officer Sergio Marchionne said in a statement.

Marchionne is forging new alliances and cutting costs at the group's auto unit to return it to profit by 2007 after four years of losses.

Since ending a failed alliance with General Motors in February, Fiat has agreed to build light commercial vehicles in Turkey with Peugeot and two weeks ago said it will build two new small cars with GM's U.S. Rival Ford Motor.

Next year Fiat will introduce a small sport utility vehicle built with Suzuki Motor Corp.