Tata-Fiat Joint Venture To Continue

Whether this news is good for Fiat fans cannot be ascertained but the Fiat-Tata joint venture is said to continue even after repeated talks of unsatisfactory performance have emerged. The terms of the contract will be revised. Many industry experts blame the dealership network for the poor performance of Fiat sales in India as most dealers tend to favour selling Tata vehicles over Fiat. The biggest issue with Fiat is the unwillingness to invest into marketing activities. A small car is a volume driver for most companies and Fiat lacks a vehicle of this size and price. With the Italian automaker scheduled to launch its own small car in the Rs. 3-4 lakh range, we can expect Fiat to increase its sales drastically next year.

“Yes, the Fiat JV is showing losses. Assumptions (made while starting the JV) in terms of volumes didn’t work out, more so for Fiat than for us because there was a downturn and they made an assumption on off-take which did not materialise. Well, as we are 50% owners, we have had to share in losses of the company. Both Fiat and we are having a re-look at the whole contractual undertaking to see whether we can make it more realistic. So, I hope we will be able to resolve that in course of time,” Ratan Tata, Chairman, Tata Sons, said.