An event that should have happened a long time back is finally complete. Fiat India has separated from Tata Motors for their solo journey in India. But speculations are rife that Fiat ended the deal because it wanted to take the relationship with Suzuki to the next level.
How does Fiat India benefit?
Fiat India, despite of being in India for donkeys years, does not have a strong standing in the Indian market. If it wasn’t for the Multijet engine, the company could have gone belly up a long time back. So an increased alliance with Suzuki, which currently accounts for 42 percent of the Indian market, would benefit Fiat in terms of establishing dealer network and expertise in the region.
Tata Motors and Fiat issued a statement today stating that the two companies are re-aligning their Indian joint-venture. The release specifically states that Tata and Fiat will continue manufacturing engines and cars at the Ranjagaon facility in Maharashtra.
A new agreement has been formed on the distribution and commercial section of the joint venture. Fiat cars will be sold through a new Fiat dealer network and Fiat will establish a new company that will be responsible for commercial and service related activities. It is not the task of the dedicated team from Tata Motors any longer.
Speaking to Auto Express, Fiat boss Sergio Marchionne says newly acquired brands like Dodge, Jeep and Chrysler could be handed the responsibility of building large cars such as seven seat SUVs or MPVs in future, leaving Fiat to focus on what it does best. The duties for Fiat will only be to develop compact and fuel efficient vehicles.
Fiat could build a crossover to complement the 500L, but its dimensions would not be bigger than the 500L which is 4.2 meters long. This could be the third model in the American lineup.
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Sure, GM may have taken the crown of the number one manufacturer in the world. But even GM knows that it was only marginally able to pull away from the German Giant – Volkswagen.
VW is planning an onslaught to reach numero uno title and so far things seem to be on track. The group owns few of the most profitable brands such as Porsche, Skoda, Seat and Audi and is expanding its footprint throughout the globe at a breath taking pace.
With VW planning to sell 10 million vehicles annually by 2018, it will be hard for smaller manufacturers like Fiat-Chrysler to sustain themselves in the market. Thus, in order to fight the VW group, Fiat is planning to tie up with France’s PSA Peugeot-Citroen. So far, it seems the only hope for survival.
Fiat’s Multijet diesel engine has worked wonders for many manufacturers in India. But if you had to pick one from the lot, it has to be Maruti Suzuki. The king pin of the small car market has gained maximum benefit from the Multijet diesel.
Currently, with sky rocketing petrol prices, Maruti Suzuki is selling 8 diesel cars for every 2 petrol cars – yes the split of Diesel to Petrol is a whopping 80-20, its also the national average.
Strengthening the ties further, Maruti Suzuki has finalized a deal to buy 1 lakh diesel engines from Fiat every year. With this deal, the company hopes to reduce the waiting period on its diesel cars.
Right now, the company is in a very sticky situation where it has a surplus of petrol cars but no capacity for the diesel ones. Most of its best selling models in the diesel avatar such as Ritz, Swift Dzire, SX4 and Swift have waiting list stretching for more than 6 months.
This deal will also help Maruti Suzuki in the future as it plans to expand its capacity to reach 1.75 million annual capacity. It has already started the process of acquiring land for the new plant in Gujarat.
Entry posted on July 21, 2010 by
Naveen;
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Yes, the numbers could have been better
Fiat India CEO, Rajeev Kapoor on the not-so-successful JV with Tata in India. Tata is failing to boost sales numbers for Fiat in India and the JV isn’t as fruitful as Fiat would expect it to be.
Alfas and Maseratis greet guest at the Auto Expo next month
Carwale is reporting Fiat will bring cars from the Alfa Romeo and Maserati stable to the Auto Expo next month. Fiat will exhibit a new dark blue color Linea along with 1.6-liter Multijet engine and 1.4-liter T-Jet engine variants in its booth.
The above cars will be accompanied by the facelifted Palio, a Fiat 500 and the Bravo, sources add.
Fiat is looking at amplifying its powertrain instead of its portfolio. It plans to rebuild the Fiat brand by selling many variants of the Palio, Punto and Linea as possible in India. We have also learned Fiat is looking to bring commercial vehicles and the first model that comes to mind is the Palio strada pickup truck.
We have to wait till the Auto Expo to learn more on these models.
The rife speculation on the Nano’s identity (as Tata or Fiat) in Latin America is still on as this drawing flies out of our good friend Chin’s scrap book.
He’s illustrated the Tata Nano Abarth version, which to some would mean stupidity. But hold your horses as more powerful engines, possibly sourced from Fiat, are likely to serve the Nano when it lands in Europe.
According to Ratan Tata, his company’s JV with Fiat is destined for bigger things. A possible re-look resulting in a wider scope will mean Fiat and Tata will not stop with just sharing engines and technology in India alone. Fiat could make a ultra-quick version of its popular Multijet engine line to suit the Nano’s needs.
Fiat could also strap the Nano with a super quick FIRE petrol engine and that coupled to the feather light body could make the Nano as quick to the 3-digit barrier as the Fiat 500 Abarth.
Wait, I don’t think the title agrees to what I’ve just said.
Better to enjoy the images.
An event that should have happened a long time back is finally complete. Fiat India has separated from Tata Motors for their solo journey in India. But speculations are rife that Fiat ended the deal because it wanted to take the relationship with Suzuki to the next level.
