Tata Fiat Joint Venture Facing Problems- Alliance To Be Examined Again


What happens when two of the global major automobile manufacturers, who are in an alliance, show discontent over a couple of issues? News happens. If you haven’t guessed it, we are talking about Fiat and Tata Joint Venture which has been in news every now and then. Reasons have been many during the past months and finally Mr.Ratan Tata has called for an examination of the JV.

Overshadowing all the other small issues the two major ones are poor quality treatment for Fiat owners and less number of Fiat models on display at Tata-Fiat dealerships. Mr. Tata still believes that the venture is of great importance and is firm on its founding business principles, yet a reexamination is needed at the time.

Mr. Ratan Tata wishes to introduce a few changes which would address the two current problems for Fiat, a small model line-up and expensive spare parts for cars like Fiat Linea and Fiat Grande Punto.


Speaking about the JV, Mr. Tata said,

“I have to admit that so far, the venture with Fiat has not been as active as we had thought. I think that Fiat has to launch more models into the market to keep dealers interested. It also has to look at its cost structure in terms of parts and components. So the joint venture needs to be looked at quite critically and until that happens, it’s not going to be optimized. 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. I think there’s nothing wrong with the concept of the deal — it is a very healthy concept.”

Considering the price sensitive market of ours the Chairman of Tata Sons wants to see Fiat to introduce low price models with the same great handling and build quality being offered with the current offerings. The present vehicle line-up of two models offers more than ten variants including CRDI diesel and MPFI petrol ones with upmarket characteristics.

No doubt the cars are extremely potent in terms of performance and impressiveness but they are definitely not the ones who could fight hard in this price sensitive market.

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