Financial Daily from THE HINDU group of publications
Saturday, Jan 14, 2006
Financial Daily from THE HINDU group of publications Saturday, Jan 14, 2006 |
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Cars Corporate - Alliances & Joint Ventures Marketing - Channels and Franchises Tata Motors, Fiat in joint drive — Marketing tie-up is first step towards deeper relationship Our Bureau
COMING TOGETHER: Mr Ratan Tata, Chairman, Tata Group, with Mr Sergio Marchionne, CEO of Fiat group, at a press conference in the Capital on Friday. - Kamal Narang
New Delhi , Jan. 13 IN a development that could see a major realignment in the domestic automobile industry, Tata Motors and Fiat came together on a single platform on Friday to announce a strategic relationship for sales and marketing of Fiat cars through Tata dealerships. Both Tata Motors' Chairman, Mr Ratan Tata, and Fiat SpA Chief Executive Officer, Mr Sergio Marchionne, who had specially flown in to be present at the press conference, were quick to point out that it was not a joint venture yet, but dropped enough hints to suggest that this first step could see both the auto giants entering into a deeper relationship. "This is not a joint venture, but this is the start of a relationship which could go beyond even a joint venture," Mr Tata said. "It is a relationship which is beginning to form. We want to give it time," Mr Marchionne said. Earlier, Tata Motors' Managing Director, Mr Ravi Kant, told reporters that a selection of Fiat cars along with service and spares will be available across Tata dealers from March. Dealers will display the new Fiat logo along with that of Tata. This deal is the first of several joint initiatives that has been started after the two carmakers signed a memorandum of understanding in September 2005. Mr Marchionne agreed that Fiat has not been successful in making any dent in the Indian market. "Today's agreement is a recognition that we do need to have a major presence in the market," he said. Mr Tata also said that though the Tata Motors was running at nearly full capacity, no decision has been made on utilising Fiat's capacity. "Whether we do it in Pune, Ranjangaon or a new location remains to be seen," Mr Tata said. He said the current alliance was an evolving relationship that did not have any barriers. "It is very prudent not to overpromise or overstate. Probably this is the healthiest way to start a relationship with no holds barred to where we go," Mr Tata said. Mr Marchionne said there is a possibility of the product portfolio in India being expanded, though it will not be done this year. He said during the last 12 months, Fiat has taken a conscious decision to open itself to other car companies globally. "It is also important to share its technology, revenues and product development capabilities," he said. Mr Marchionne said even though the company has tied up with Suzuki for the diesel engine plant being set up in India, it would not pose a problem for any new joint ventures with other partners. He said Fiat was financially stable after a long time. "We have the highest of financial stabilities so far and probably we have the best dealership team so far," he said.
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